Lucian T. Baldwin, III - Page 30

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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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