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expenses. At best, petitioner’s activity was a fanciful attempt,
not grounded in reality, to reach some promised land.
Accordingly, we hold that petitioner did not engage in his
“health, wealth and healing ministry” activity for profit within
the meaning of section 183 in either of the years in issue.7
B. Schedule C Deductions
Although petitioner did not report any income from his
“health, wealth and healing ministry” activity in 1996, he did
report $1,400 from such activity in 1997. This is relevant
because even if an activity is not engaged in for profit, section
183(b) allows deductions to the extent of gross income. Of
course, deductions must still be substantiated. See generally
secs. 162, 274; Hradesky v. Commissioner, 65 T.C. 87, 90 (1975),
affd. per curiam 540 F.2d 821 (5th Cir. 1976). In this regard,
respondent contends that petitioner failed to substantiate any
deductions.
At trial, petitioner introduced no substantiation that would
satisfy the stringent recordkeeping requirements of section
274(d). See Sanford v. Commissioner, 50 T.C. 823, 827 (1968),
affd. per curiam 412 F.2d 201 (2d Cir. 1969); sec. 1.274-5T(a),
Temporary Income Tax Regs., 50 Fed. Reg. 46014 (Nov. 6, 1985).
7 Our holding also serves to absolve petitioner from
liability for self-employment tax for 1997, see sec. 1402(a) and
(c), and to deny him any deduction under sec. 164(f) for that
year.
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