- 9 -
see Keanini v. Commissioner, supra at 46; Antonides v.
Commissioner, 91 T.C. at 694; Abramson v. Commissioner, 86 T.C.
360, 371 (1986); Dreicer v. Commissioner, supra at 645; Golanty
v. Commissioner, 72 T.C. 411, 426 (1979), affd. without published
opinion 647 F.2d 170 (9th Cir. 1981); sec. 1.183-2(a) and (b),
Income Tax Regs.
The Court of Appeals for the Fifth Circuit, to which this
case is appealable, requires that the taxpayer engage in the
activity with the “primary purpose” of realizing an economic
profit independent of tax savings. See Commissioner v.
Groetzinger, 480 U.S. 23, 35 (1987); Westbrook v. Commissioner,
68 F.3d 868, 875 (5th Cir. 1995), affg. T.C. Memo. 1993-634; cf.
Keanini v. Commissioner, supra. We therefore apply the “primary
purpose” standard.
Respondent concedes that he bears the burden of proof on
this issue because he raised the claim in an amended answer. See
Rule 142(a); Welch v. Helvering, 290 U.S. 111 (1933). To
succeed, therefore, respondent must prove that petitioner did not
7(...continued)
(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.
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