Sheila Mae Howard - Page 12

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          profit objective, profit means economic profit, independent of              
          tax savings.  See Surloff v. Commissioner, 81 T.C. 210, 233                 
          (1983).  The taxpayer bears the burden of proving that he or she            
          engaged in the activity with the objective of making a profit.              
          See Rule 142(a); INDOPCO, Inc. v. Commissioner, supra at 84;                
          Welch v. Helvering, supra at 115.                                           
               The regulations set forth a nonexhaustive list of factors              
          that may be considered in deciding whether a profit objective               
          exists.  These factors are: (1) The manner in which the taxpayer            
          carries on the activity; (2) the expertise of the taxpayer or his           
          advisers; (3) the time and effort expended by the taxpayer in               
          carrying on the activity; (4) the expectation that the assets               
          used in the activity may appreciate in value; (5) the success of            
          the taxpayer in carrying on other similar or dissimilar                     
          activities; (6) the taxpayer’s history of income or losses with             
          respect to the activity; (7) the amount of occasional profits, if           
          any, which are earned; (8) the financial status of the taxpayer;            
          and (9) any elements indicating personal pleasure or recreation.            
          See sec. 1.183-2(b), Income Tax Regs.                                       
               No single factor, nor even the existence of a majority of              
          factors favoring or disfavoring the existence of a profit                   
          objective, is controlling.  See id.  Rather, the relevant facts             
          and circumstances of the case are determinative.  See Golanty v.            
          Commissioner, 72 T.C. 411, 426 (1979), affd. without published              

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