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auction during 1990 various personal property that was not used
in the lodge renovation and claimed the auction proceeds as
business income.
Although there were isolated episodes in which LFI began to
explore possible money-making ventures, these activities never
materialized into a real business venture, either individually or
collectively. For example, the Christmas tree operation, which
began with the planting of trees in 1989, was abandoned within a
year after the initial planting because over half of the trees
planted had died. Similarly, the experiment with maple sugaring
was abandoned after LFI’s caretaker’s wife suffered burns during
the processing of the sap. The timbering operation likewise
never got past the exploratory stage. The auction was a one-time
sale of excess furnishings that were not used in the renovation
of the lodge and, under the circumstances, was the functional
equivalent of a garage sale, only on a larger scale. “Carrying
on a trade or business” requires a showing of more than initial
research into or investigation of business potential. Frank v.
Commissioner, 20 T.C. 511, 513 (1953). None of the above-listed
activities, either individually or collectively, were conducted
with continuity or regularity and, hence, do not constitute a
trade or business for purposes of section 162. See Commissioner
v. Groetzinger, 480 U.S. at 35.
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