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proving that petitioner and SMSM engaged in the activity in
question with an actual and honest objective of realizing a
profit. Hendricks v. Commissioner, 32 F.3d 94, 98 (4th Cir.
1994), affg. T.C. Memo. 1993-396. The parties do not cite
section 7491, and no claim is made herein that the burden of
proof should be shifted to respondent.
Although the section 183 analysis with respect to the
activities of an S corporation is applied at the corporate level,
a taxpayer’s objective or intent is attributable to his wholly
owned S corporation. Ballard v. Commissioner, T.C. Memo. 1996-
68; sec. 1.183-1(f), Income Tax Regs.
A profit objective in an earlier year does not give a
taxpayer a blank check with regard to losses incurred in later
years (i.e., in a later year an activity may be treated as an
activity not engaged in for profit even though in an earlier year
the activity may have been conducted by the taxpayer with a
profit objective). See dicta in Dennis v. Commissioner, T.C.
Memo. 1984-4; Daugherty v. Commissioner, T.C. Memo. 1983-188.
To determine whether a taxpayer had the requisite profit
objective, we consider all of the surrounding facts and
circumstances. Keanini v. Commissioner, supra at 46 (citing
Lemmen v. Commissioner, 77 T.C. 1326, 1340 (1981)); Golanty v.
Commissioner, supra at 426; sec. 1.183-2(a) and (b), Income Tax
Regs.
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