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The regulations list several factors to consider in
analyzing whether a profit objective exists, none of which
generally is alone determinative. Antonides v. Commissioner, 91
T.C. 686, 694 (1988), affd. 893 F.2d 656 (4th Cir. 1990). Some
factors may be given more weight than others because they may be
more meaningfully applied to the evidence in a particular case.
Hendricks v. Commissioner, supra at 98; sec. 1.183-2(b), Income
Tax Regs.
On the sale of property, under section 1231 a taxpayer may
treat a net loss on the sale as an ordinary loss only if the loss
involved a sale of property that was used in the taxpayer’s trade
or business. Sec. 1231(a)(2) and (3) and (b). In analyzing
whether an activity in connection with which property is sold
constituted a trade or business (for purposes of ordinary loss
treatment under section 1231), a taxpayer’s profit objective, or
lack thereof, relating to the activity is particularly
significant. Helvering v. Highland, 124 F.2d 556, 561 (4th Cir.
1942) (involving a claim of business expense deductions under
section 23(a), the predecessor of section 162(a)); Abbene v.
Commissioner, T.C. Memo. 1998-330. Also relevant are factors
relating to the manner, continuity, and regularity with which an
activity is conducted. Commissioner v. Groetzinger, 480 U.S. 23,
35 (1987); De Amodio v. Commissioner, 34 T.C. 894, 906 (1960),
affd. 299 F.2d 623 (3d Cir. 1962).
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