- 11 - explicitly except C corporations, stating that no inference may be drawn from section 183 and its regulations as to whether a corporation is engaged in an activity for profit. Sec. 1.183- 1(a), Income Tax Regs. The point of amalgamating two undertakings into a single activity is to net the expenses of one against the revenue of the other, an objective that cannot be accomplished where one undertaking is that of a C corporation and the other is an undertaking by an individual. Because the law firm was a C corporation, petitioner may not group the law firm with his leasing activity for purposes of section 183.8 B. Whether the Activity Was Engaged In for Profit Although we agree with respondent that the leasing activity and the law practice cannot be grouped, we nonetheless find that respondent has failed to meet his burden to show that petitioner did not engage in the leasing activity with the primary purpose to earn a profit. See Swaffar v. Commissioner, T.C. Memo. 1992- 180 (the Court did not affirmatively find that the taxpayers lacked a profit objective, but rather found only that the Commissioner failed to prove that the taxpayers lacked a profit 8Petitioner also argues that, if we do not group the two undertakings, the law firm’s profit objective still should be attributed to his leasing activity. See Campbell v. Commissioner, 868 F.2d 833 (6th Cir. 1989), revg. T.C. Memo. 1986-569; Wilkinson v. Commissioner, T.C. Memo. 1996-39; De Mendoza v. Commissioner, T.C. Memo. 1994-314; Kuhn v. Commissioner, T.C. Memo. 1992-460; cf. Baldwin v. Commissioner, T.C. Memo. 2002-162. We need not resolve this issue.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011