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claimed amounts, or the expense deductions were not otherwise
allowable.
A taxpayer seeking to deduct trade or business expenses
under section 162 must establish that the underlying activity was
engaged in with an actual and honest profit objective. Dreicer
v. Commissioner, 78 T.C. 642, 645 (1982), affd. without published
opinion 702 F.2d 1205 (D.C. Cir. 1983). The taxpayer must have
entered into or continued the activity with the actual, honest,
and bona fide objective of making a profit. Filios v.
Commissioner, 224 F.3d 16, 23 (1st Cir. 2000), affg. T.C. Memo.
1999-92; Dreicer v. Commissioner, supra at 644-645; sec. 1.183-
2(a), Income Tax Regs. In determining whether the taxpayer has
the objective of making a profit, it may be sufficient that there
is a small chance of making a large profit. Sec. 1.183-2(a),
Income Tax Regs. Objective indicia may be considered to
establish the taxpayer’s true intent. Id. We consider all of
the facts and circumstances in determining whether a taxpayer
entered into the activity for a profit, placing greater weight
upon objective facts than the taxpayer’s statements of intent.
Dreicer v. Commissioner, supra at 645.
The following nine nonexclusive factors are relevant in
determining whether the taxpayer engaged in the activity for
profit: (1) The manner in which the taxpayer carries on the
activity; (2) the expertise of the taxpayer or her advisers; (3)
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