- 8 - respondent disallowed as deductions relate to petitioners’ daughter’s stay in Atlanta in 1996. Discussion Under section 162(a), taxpayers are allowed a deduction for all ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business. To this end, “the taxpayer must be involved in the activity with continuity and regularity and * * * the taxpayer’s primary purpose for engaging in the activity must be for income or profit.” Commissioner v. Groetzinger, 480 U.S. 23, 35 (1987). Under section 183(a), if an activity engaged in by an individual is not engaged in primarily for profit, no deduction attributable to such activity shall be allowed except to the extent allowable under section 183(b), not relevant herein. Section 183(c) defines an “activity not engaged in for profit” as “any activity other than one with respect to which deductions are allowable for the taxable year under section 162 or under paragraph (1) or (2) of section 212.” In determining whether an individual engages in an activity for profit, we consider all the facts and circumstances, Golanty v. Commissioner, 72 T.C. 411, 426 (1979), affd. without published opinion 647 F.2d 170 (9th Cir. 1981), including the following factors identified in section 1.183-2(b), Income Tax Regs.: (1) Manner in which the taxpayer carries on the activity;Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011