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deductible under section 162 and/or section 165.5 Respondent
argues that Turtle Performance was not a trade or business during
any of the years in issue because petitioner did not engage in
that activity with the requisite profit objective. According to
respondent, expenditures attributable to that activity are only
deductible as allowed by section 183.6 For the following
5 In general, sec. 162 allows a deduction for all ordinary
and necessary expenses incurred in carrying on a trade or
business. In the case of an individual, sec. 165(c)(1) generally
allows a deduction for any losses incurred in a trade or
business.
6 In relevant part, sec. 183 states:
(a) General Rule.–-In the case of an activity engaged
in by an individual or an S corporation, if such activity is
not engaged in for profit, no deduction attributable to such
activity shall be allowed under this chapter except as
provided in this section.
(b) Deductions Allowable.–-In the case of an activity
not engaged in for profit to which subsection (a) applies,
there shall be allowed--
(1) the deductions which would be allowable under
this chapter for the taxable year without regard to
whether or not such activity is engaged in for profit,
and
(2) a deduction equal to the amount of the
deductions which would be allowable under this chapter
for the taxable year only if such activity were engaged
in for profit, but only to the extent that the gross
income derived from such activity for the taxable year
exceeds the deductions allowable by reason of paragraph
(1).
(continued...)
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