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allowable only to the extent gross income derived from the
activity exceeds deductions that would be allowable under section
183(b)(1) without regard to whether the activity constitutes a
for-profit activity. See Allen v. Commissioner, 72 T.C. 28, 32-
33 (1979).
The taxpayer bears the burden of establishing that his or
her activities were engaged in for profit. Rule 142(a). To
carry this burden, the taxpayer must show that he or she had a
“good faith expectation of profit”. Burger v. Commissioner, 809
F.2d 355, 358 (7th Cir. 1987), affg. T.C. Memo. 1985-523; see
Dreicer v. Commissioner, 78 T.C. 642, 645 (1982), affd. without
opinion 702 F.2d 1205 (D.C. Cir. 1983). The taxpayer’s
expectation, however, need not be reasonable. Burger v.
Commissioner, supra; Golanty v. Commissioner, 72 T.C. 411, 425
(1979), affd. without published opinion 647 F.2d 170 (9th Cir.
1981); sec. 1.183-2(a), Income Tax Regs. Whether the taxpayer
has the requisite profit motive is a question of fact, to be
resolved on the basis of all relevant circumstances, with greater
weight being given to objective factors than to mere statements
of intent. Dreicer v. Commissioner, supra; Golanty v.
Commissioner, supra at 426.
The regulations under section 183 provide a nonexclusive
list of factors to be considered in determining whether an
activity is engaged in for profit. The factors include: (1) The
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