Raymond J. and Ilene H. Pavelko - Page 7

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          Cir. 1967).  More weight is given to objective facts than to the            
          taxpayer’s statement of his or her intent.  Engdahl v.                      
          Commissioner, 72 T.C. 659, 666 (1979); sec. 1.183-2(a), Income              
          Tax Regs.                                                                   
               The regulations under section 183 provide nine nonexclusive            
          factors to be used in determining whether a taxpayer is                     
          conducting an activity with the intent to make a profit.  Sec.              
          1.183-2(b), Income Tax Regs.  The factors are: (1) The manner in            
          which the taxpayer carried on the activity; (2) the expertise of            
          the taxpayer or his or her 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) elements of personal pleasure or            
          recreation.  Id.  No single factor controls, other factors may be           
          considered, and the mere fact that the number of factors                    
          indicating the lack of a profit objective exceeds the number                
          indicating the presence of a profit objective (or vice versa) is            
          not conclusive.  Id.                                                        
               We first address the 1996 rental activity.  Petitioner                 
          testified that this activity involved the rental of real estate             

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