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Whether the requisite profit objective exists is determined
by looking at all the surrounding facts and circumstances.
Keanini v. Commissioner, 94 T.C. 41, 46 (1990); sec. 1.183-2(b),
Income Tax Regs. In determining whether such objective exists,
it may be sufficient that there is a small chance of making a
large profit. Sec. 1.183-2(a), Income Tax Regs. Greater weight
is given to objective facts than to taxpayer’s mere statement of
intent. Thomas v. Commissioner, 84 T.C. 1244, 1269 (1985), affd.
792 F.2d 1256 (4th Cir. 1986); sec. 1.183-2(a), Income Tax Regs.
Petitioners bear the burden of proof.6 Rule 142(a).
Section 1.183-2(b), Income Tax Regs., provides a list of
factors to be considered in the evaluation of a taxpayer’s profit
objective: (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 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, from the
activity; (8) the financial status of the taxpayer; and (9)
elements of personal pleasure or recreation. This list is
6 The parties do not argue the applicability of sec.
7491(a).
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