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Sec. 1.183-2(b)(5), Income Tax Regs.; Lundquist v. Commissioner,
supra; De Mendoza v. Commissioner, supra. Petitioners testified
that Dr. Remler has a history of receiving grants in medicine and
Dr. Velez runs a successful surgery practice. We find that
petitioners’ successes in the medical world do not necessarily
translate into successfully running their special education
activity. See Hastings v. Commissioner, T.C. Memo. 2002-310.
These facts are neutral.
6. Petitioners’ History of Income or Losses With Respect
to the Activity
A series of losses during the initial or startup stage of an
activity may not necessarily be an indication that the activity
is not engaged in for profit. Sec. 1.183-2(b)(6), Income Tax
Regs.; Engdahl v. Commissioner, 72 T.C. at 669; Dworshak v.
Commissioner, supra; De Mendoza v. Commissioner, supra.
Petitioners had losses from their special education activity
during the years in issue. However, these losses were during the
initial or startup stage of the activity. This fact is neutral.
7. The Amount of Occasional Profits, If Any, Which Are
Earned
The amount of profits in relation to the amount of losses
incurred may provide a useful criterion in evaluating whether the
taxpayer engaged in the activity for profit. Sec. 1.183-2(b)(7),
Income Tax Regs. Petitioners did not earn any profits during the
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