James A. and Corlis L. Perry - Page 7

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          facts and circumstances of the case in issue remain the primary             
          test.  Id.                                                                  
               In determining whether petitioner was engaged as a tutor and           
          as an editor with the requisite intent to make a profit, all of             
          the facts and circumstances of his situation must be taken into             
          account.  Golanty v. Commissioner, 72 T.C. 411, 426 (1979), affd.           
          without published opinion 647 F.2d 170 (9th Cir. 1981); sec.                
          1.183-2(a) and (b), Income Tax Regs.  No single factor is                   
          controlling, nor is the existence of a majority of factors                  
          favoring or disfavoring a profit objective necessarily                      
          controlling.  Hendricks v. Commissioner, 32 F.3d 94, 98 (4th Cir.           
          1994), affg. T.C. Memo. 1993-396; sec. 1.183-2(b), Income Tax               
          Regs.                                                                       
               Petitioner generally bears the burden of proof with respect            
          to this determination.  Rule 142(a); Golanty v. Commissioner,               
          supra at 426; McCarthy v. Commissioner, T.C. Memo. 2000-135.                
          Petitioner does not argue the applicability of section 7491(a),             
          and the record reflects that section 7491(a) does not apply.                
               Petitioner contends that he was engaged for profit as both a           
          tutor and an editor.                                                        
               Petitioner’s deductions with respect to each of the alleged            
          activities consisted of unsubstantiated and unwarranted                     
          deductions and personal expenses.  For example, petitioner used             
          the Schedules C to claim inflated deductions for expenses, such             
          as mortgage interest on petitioners’ personal residence.                    





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