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who had not yet achieved profitability, but nevertheless
maintained a studio and gallery and participated in shows. We
recognized then that economic success in the world of fine art
frequently takes longer to achieve than success in other fields.
The same is true of literature. Id. at 701-702. In Vitale v.
Commissioner, T.C. Memo. 1999-131, affd. 217 F.3d 843 (4th Cir.
2000), we allowed the taxpayer to deduct many of his expenses of
researching a book, despite the fact that he had not yet achieved
profitability as an author. Petitioner’s activity is reminiscent
of Vitale’s--he has likewise engaged in extensive research,
generated large losses, and claimed his intent was ultimately to
achieve a profit.
With this special lens in place, we look at each of the
factors listed in the relevant regulation. The first is whether
the activity was run in a businesslike way. Sec. 1.183-2(b)(1),
Income Tax Regs. In Churchman, we listed six reasons for finding
that her activity was: (1) she designed an art gallery and
maintained it for a year; (2) she kept a mailing list to announce
her shows; (3) she traveled to out-of-town locations to show her
art; (4) she had published a book; (5) in the face of poor sales,
she tried to change her material to meet public demand; and (6)
she had kept records of her sales and expenses, albeit not
complete books and records.
Professor Calarco has shown similar indications of business-
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