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proof on respondent in this case. Petitioners have neither
argued that section 7491 is applicable nor established that they
complied with the requirements of section 7491(a)(2)(A) and (B)
to substantiate items, to maintain required records, and to
cooperate fully with respondent's reasonable requests. In
addition, as discussed below, they have failed to introduce
credible evidence with respect to certain factual issues.
The Court of Appeals for the Ninth Circuit, to which an
appeal in this case would lie, has held that, for a deduction to
be allowed under section 162 or section 212(1) or (2), a taxpayer
must establish that he engaged in the activity with the primary,
predominant, or principal purpose and intent of realizing an
economic profit independent of tax savings. Wolf v.
Commissioner, 4 F.3d 709, 713 (9th Cir. 1993), affg. T.C. Memo.
1991-212; Dunn v. Commissioner, 70 T.C. 715, 720 (1978), affd.
615 F.2d 578 (2d Cir. 1980). The taxpayer's expectation need not
be a reasonable one, but the profit objective must be bona fide.
Golanty v. Commissioner, supra at 426; sec. 1.183-2(a), Income
Tax Regs. In determining whether the requisite intention to make
a profit exists, greater weight is to be given to the objective
facts than to the taxpayer's self-serving characterization of his
intent. Indep. Elec. Supply, Inc. v. Commissioner, 781 F.2d 724,
726 (9th Cir. 1986), affg. Lahr v. Commissioner, T.C. Memo. 1984-
472; sec. 1.183-2(a), Income Tax Regs.
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