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affd. 893 F.2d 656 (4th Cir. 1990); Dreicer v. Commissioner, 78
T.C. 642, 644-645 (1982), affd. without opinion 702 F.2d 1205
(D.C. Cir. 1983). The expectation of profit need not have been
reasonable; however, the taxpayer must have entered into the
activity, or continued it, with the objective of making a profit.
Hulter v. Commissioner, 91 T.C. 371, 393 (1988); sec. 1.183-2(a),
Income Tax Regs.
Whether the requisite profit objective exists is determined
by examining all of the surrounding facts and circumstances.
Keanini v. Commissioner, 94 T.C. 41, 46 (1990); sec. 1.183-2(b),
Income Tax Regs. Greater weight is given to objective facts than
to a taxpayer’s mere statement of intent. Thomas v.
Commissioner, 84 T.C. 1244, 1269 (1985), affd. 792 F.2d 1256 (4th
Cir. 1986); sec. 1.183-2(a), Income Tax Regs.
Although section 7491(a) places the burden of proof on the
Commissioner with regard to certain factual issues involving
examinations commenced after July 22, 1998, petitioners do not
assert that section 7491(a) shifts the burden to respondent, nor
have petitioners complied with the substantiation and record-
keeping requirements of section 7491(a)(2). Therefore, the
burden of proof remains on petitioners.
Section 1.183-2(b), Income Tax Regs., provides a list of
factors to be considered in determining whether a taxpayer had a
profit objective: (1) The manner in which the taxpayer carried
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