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actual sales and marketing activities, with the start of an
active trade or business as a distributor for the Cabintaxi
system. Id. at 620-621.
In contrast, petitioners here have failed to prove that
Shrike Cars’ efforts in 1998 ever reached a point where there
existed a commercial product to sell and/or that they were
focused on selling, marketing, or distributing a specific product
or products. Rather, the Shrike Cars business, as of 1998,
remained in an exploratory stage. Notably, the taxpayer in
Cabintaxi Corp. v. Commissioner, supra, did not take the
position, and the Court of Appeals for the Seventh Circuit did
not hold, that costs incurred prior to 1984 should be deductible
as expenses of an ongoing business. After its founding in 1981
and before 1984, the taxpayer “investigated opportunities for
creating and deploying automated transit systems” and “hoped to
form an alliance with an individual who was developing an
automated transportation system.” Cabintaxi Corp. v.
Commissioner, T.C. Memo. 1994-316, affd. in part, revd. in part
and remanded 63 F.3d 614 (7th Cir. 1995). The taxpayer
characterized costs incurred during that period as startup and
organizational expenditures, which it capitalized and sought to
amortize beginning in 1984 under sections 195 and 248. Id.
Here, Shrike Cars’ activities would appear more akin to
Cabintaxi Corp.’s pre-1984 endeavors, which endeavors were
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