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reasons, we agree with respondent.
The term “trade or business” is not precisely defined in the
Internal Revenue Code or the regulations promulgated thereunder;
however, it is well established that in order for an activity to
be considered a taxpayer’s trade or business for purposes
relevant here, the activity must be conducted “with continuity
and regularity” and “the taxpayer’s primary purpose for engaging
in the activity must be for income or profit.” Commissioner v.
Groetzinger, 480 U.S. 23, 35 (1987). After careful
consideration, we are not persuaded that petitioner’s primary
purpose for engaging in Turtle Performance was for income or
profit.
The test of whether a taxpayer conducted an activity for
profit is whether he or she entered into, or continued, the
activity with the actual or honest objective of making a profit.
See Keanini v. Commissioner, 94 T.C. 41, 46 (1990); Dreicer v.
Commissioner, 78 T.C. 642, 644-645 (1982), affd. without
6(...continued)
(c) Activity Not Engaged In For Profit Defined.–-For
purposes of this section, the term “activity not engaged in
for profit” means any activity other than one with respect
to which deductions are allowable for the taxable year under
section 162 or under paragraph (1) or (2) of section 212.
We note that for years 1995 and 1996 income reported on the
Schedules C actually includes employee business expense
reimbursements improperly characterized as income from Turtle
Performance.
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