Dennis E. and Paula W. Lofstrom - Page 14

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          expectation of profit is not required, the taxpayer’s objective             
          of making a profit must be bona fide.  See Wittstruck v.                    
          Commissioner, supra at 619; Elliott v. Commissioner, 84 T.C. 227,           
          236 (1985), affd. without published opinion 782 F.2d 1027 (3d               
          Cir. 1986).  The Court gives greater weight to objective factors            
          in making the factual determination than to a taxpayer’s mere               
          statement of intent.  See Indep. Elec. Supply, Inc. v.                      
          Commissioner, 781 F.2d 724 (9th Cir. 1986), affg. Lahr v.                   
          Commissioner, T.C. Memo. 1984-472; Dreicer v. Commissioner, 78              
          T.C. 642, 645 (1982), affd. without opinion 702 F.2d 1205 (D.C.             
          Cir. 1983); sec. 1.183-2(a), Income Tax Regs.                               
               We consider several factors13 in determining whether                   
          Mr. Lofstrom was engaged in the writing activity for profit,                
          including the manner in which he carried on the activity, the               
          time and effort he expended on the activity, the history of                 
          income or loss with respect to the activity, and the amount of              

               13The Court generally considers nine nonexclusive factors              
          for determining whether taxpayers engaged in an activity for                
          profit.  Sec. 1.183-2(b), Income Tax Regs.  Petitioners here                
          failed to produce relevant evidence regarding many of the                   
          factors, and we consequently confine our analysis to four of the            
          nine factors.  The nine factors are:  (1) The manner in which the           
          taxpayer carried on the activity; (2) the expertise of the                  
          taxpayer or his advisers; (3) the time and effort expended by the           
          taxpayer in carrying on the activity; (4) the expectation that              
          the assets used in the activity may appreciate in value; (5) the            
          success of the taxpayer in carrying on other activities for                 
          profit; (6) the taxpayer’s history of income or losses with                 
          respect to the activity; (7) the amount of occasional profits, if           
          any, which are earned; (8) the financial status of the taxpayer;            
          and (9) elements of personal pleasure or recreation.  Id.                   





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