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There being no statutory or regulatory definition of a trade or
business, the courts have established criteria for determining
the existence of a trade or business. See, e.g., Commissioner v.
Groetzinger, 480 U.S. 23, 27 (1987). In order to be engaged in a
trade or business, the taxpayer must be involved in the activity
with continuity and regularity, and the taxpayer's primary
purpose for the activity must be the creation of income or
profit. Id. at 35; Nickerson v. Commissioner, 700 F.2d 402, 404
(7th Cir. 1983). The taxpayer need not have a reasonable
expectation of profit for his activities to constitute a trade or
business but must conduct the enterprise with a good faith
intention of making a profit or producing income. Burger v.
Commissioner, 809 F.2d 355, 358 (7th Cir. 1987), affg. T.C. Memo.
1985-523; Intl. Trading Co. v. Commissioner, 275 F.2d 578, 584
(7th Cir. 1960), affg. T.C. Memo. 1958-104; Golanty v.
Commissioner, 72 T.C. 411, 425-426 (1979), affd. without
published opinion 647 F.2d 170 (9th Cir. 1981).
Profit objective is a question of fact to be determined from
all of the facts and circumstances. Allen v. Commissioner, 72
T.C. 28, 34 (1979); Dunn v. Commissioner, 70 T.C. 715, 720
(1978), affd. 615 F.2d 578 (2d Cir. 1980). More weight is given
to objective facts than to the taxpayer's statement of his
intent. Burger v. Commissioner, supra at 358; Engdahl v.
Commissioner, 72 T.C. 659, 666 (1979). In determining whether a
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