- 9 - 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...)Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011