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taxpayer must show that during the hiatus he intended to resume
the same trade or business. Gallo v. Commissioner, T.C. Memo.
1998-100.
Petitioner testified that upon his retirement he intended to
resume his insurance business as soon as he could. When
questioned as to his state of mind after the sixth, seventh or
eighth year of retirement, petitioner replied that he was still
too ill to return to work but was "hopeful" that he could return
eventually. In reply to the question as to his state of mind
after the 10th or 11th year of retirement, petitioner testified
that he still held out "hope", but he admitted that he "was
wondering about it".
The cases apply the hiatus principle to "temporary"
cessations of business. When, however, the cessation is
prolonged, with no continuing connection with the trade or
business or intent to actively carry on the trade or business,
the taxpayer is not "carrying on" his trade or business while on
"hiatus". See Estate of Rockefeller v. Commissioner, 762 F.2d
264, 270-271 (2d Cir. 1985), affg. 83 T.C. 368 (1984); Canter v.
United States, 173 Ct. Cl. 723, 354 F.2d 352 (1965) (4 years is
not "temporary"); Corbett v. Commissioner, 55 T.C. 884 (1971).
The Court finds petitioner to have been an exceptionally
conscientious insurance agent and genuinely loyal to his former
clients. But that does not mean that he was "carrying on" a
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