- 22 -
paragraph (1) or (2) of section 212." In general, deductions are
allowable under sections 162 or 212 for activities in which the
taxpayer engaged with the primary purpose and dominant hope and
intent of realizing a profit. Commissioner v. Groetzinger, 480
U.S. 23, 35 (1987); Hayden v. Commissioner, 889 F.2d 1548, 1552
(6th Cir. 1989), affg. T.C. Memo. 1988-310; Novak v.
Commissioner, T.C. Memo. 2000-234. "An activity is engaged in
for profit if the taxpayer entertained an actual and honest, even
though unreasonable or unrealistic, profit objective in engaging
in the activity." Campbell v. Commissioner, 868 F.2d 833, 836
(6th Cir. 1989), affg. in part, revg. in part and remanding T.C.
Memo. 1986-569; Keanini v. Commissioner, 94 T.C. 41, 46 (1990);
Dreicer v. Commissioner, 78 T.C. 642, 644-645 (1982), affd.
without published opinion 702 F.2d 1205 (D.C. Cir. 1983); sec.
1.183-2(a), Income Tax Regs.
Whether the taxpayer engaged in an activity with the
requisite profit objective is a question of fact to be determined
by examining all the facts and circumstances, giving greater
weight to objective facts than to the taxpayer's mere statement
of intent. Engdahl v. Commissioner, 72 T.C. at 666; sec. 1.183-
2(a), Income Tax Regs. The taxpayer bears the burden of proving
the requisite profit objective. See Rule 142(a); Hayden v.
Commissioner, supra at 1552; Golanty v. Commissioner, 72 T.C.
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