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activity. Respondent disallowed petitioners’ losses relating to
the jet charter activity for 1993, 1994, and 1997 in a notice of
deficiency dated November 15, 2001, determining that, among other
issues, petitioners did not engage in their jet charter activity
for profit under section 183. Petitioners timely filed a
petition with this Court seeking redetermination of the
disallowed losses and asserting that they engaged in the jet
charter activity with the intent of making a profit.
OPINION
A. Whether Petitioners Operated BHJ for Profit
We are asked to decide whether petitioners operated BHJ for
profit during the relevant years within the meaning of section
183. Section 183(a) provides generally that if an individual
engages in an activity and “if such activity is not engaged in
for profit, no deduction attributable to such activity shall be
allowed under this chapter except as provided in this section.”
Deductions that would be allowable without regard to whether the
activity is engaged in for profit shall be allowed under section
183(b)(1), and deductions that would be allowable only if the
activity is engaged in for profit shall be allowed under section
183(b)(2), but only to the extent that the gross income from the
activity exceeds the deductions allowable under section
183(b)(1).
We follow the Court of Appeals opinion squarely on point
when appeal from our decision would lie to that court absent
stipulation by the parties to the contrary. Golsen v.
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