- 17 -
Commissioner, 339 F.2d 377, 380 (2d Cir. 1964), affg. T.C. Memo.
1964-2; Dreicer v. Commissioner, 78 T.C. 642, 645 (1982), affd.
without opinion 702 F.2d 1205 (D.C. Cir. 1983); Jasionowski v.
Commissioner, 66 T.C. 312, 319 (1976); sec. 1.183-2(a), Income
Tax Regs. Although a taxpayer’s expectation of profit need not
be reasonable, there must be a good faith objective of making a
profit. See Dreicer v. Commissioner, supra.
There is no evidence in the record that any of the
properties listed in the 1988 return has ever generated a profit,
or that petitioner expected that they would ever become
profitable, either individually or as a group. To the contrary,
petitioner, on brief, indicates that he never believed that his
rental properties would become profitable. For example, in
defense of his nonpayment of estimated taxes for the audit year,
petitioner states in his opening brief:
Petitioner cannot be held liable for failing
to file an estimated tax return because the
Petitioner did not owe any taxes and has
never owed any taxes to the Internal Revenue
Service in the more than 50 years he has been
filing income taxes. The deductions
Petitioner has used for this tax year and all
other tax years have always [been] in excess
of the income he has earned and therefore
Petitioner * * * had not [sic] duty to file
any estimated income tax. [Emphasis added.]
Similarly, in his reply brief, petitioner states:
There was not [sic] need to pay estimated tax
since I have never owed the IRS an estimated
tax in 20 years of practicing law and renting
properties.
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