- 8 -
entered into with the dominant hope and intent of realizing a
profit. Wolf v. Commissioner, 4 F.3d 709, 713 (9th Cir. 1993)
(profit must be the predominant, primary, or principal
objective), affg. T.C. Memo. 1991-212; Vorsheck v. Commissioner,
933 F.2d 757, 758 (9th Cir. 1991); Machado v. Commissioner, T.C.
Memo. 1995-526, affd. without published opinion 119 F.3d 6 (9th
Cir. 1997); Warden v. Commissioner, T.C. Memo. 1995-176, affd.
without published opinion 111 F.3d 139 (9th Cir. 1997). This
Court considers whether an activity is engaged in for profit on a
case by case basis, taking into account the facts and
circumstances involved. See Golanty v. Commissioner, 72 T.C.
411, 426 (1979), affd. without published opinion 647 F.2d 170
(9th Cir. 1981).
The taxpayer’s expectation of profit need not be reasonable,
but it must be established that the activity was conducted with a
good faith expectation of making a profit. Engdahl v.
Commissioner, 72 T.C. 659, 666 (1979); Golanty v. Commissioner,
supra at 425-426; sec. 1.183-2(a), Income Tax Regs. In assessing
a profit motive, greater weight is given to objective facts over
the taxpayer’s mere statement of intent. Indep. Elec. Supply,
Inc. v. Commissioner, 781 F.2d 724, 726-727 (9th Cir. 1986),
7(...continued)
Court of Appeals to which an appeal of its decision lies, Golsen
v. Commissioner, 54 T.C. 742 (1970), affd. 445 F.2d 985 (10th
Cir. 1971), even in cases subject to sec. 7463(b).
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011