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corporation that is operated for the pleasure or recreation of
its shareholders is not engaged in a trade or business. Intl.
Trading Co. v. Commissioner, 275 F.2d 578, 584 (7th Cir. 1960),
affg. T.C. Memo. 1958-104.
The extensive personal use of BAC’s aircraft by petitioner
and his family, friends, and business acquaintances, coupled with
petitioner’s failure to prove a legitimate economic connection
between his successful commodity trading business and BAC,
convinces us that BAC’s air transportation activity was not an
activity engaged in for profit.
3. Conclusion
After considering the factors listed in section 1.183-2(b),
Income Tax Regs., we hold that BAC was not engaged in an activity
for profit. We decline to address respondent’s other arguments
with respect to the BAC adjustments because our conclusion under
section 183 adequately disposes of respondent’s adjustments with
respect to BAC.24
24Pursuant to sec. 183(b), respondent has allowed petitioner
additional miscellaneous itemized deductions for BAC’s expenses
in amounts equal to BAC’s corrected S corporation income in each
of the years in dispute (before application of the 2-percent
adjusted gross income limitation of sec. 67). Consequently, we
do not separately address the parties’ arguments regarding the
calculation of BAC’s depreciation deduction under sec. 280F or
the ownership of the Cessna that was depreciated by BAC.
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