- 7 -
1990), affg. 91 T.C. 686 (1988). Petitioner has the burden of
proving that he was engaged in a trade or business. Rule 142(a);
INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992); New
Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934); Welch v.
Helvering, 290 U.S. 111 (1933).
This Court in Kurkjian v. Commissioner, 65 T.C. 862, 868
(1976) (quoting Hirsch v. Commissioner, 315 F.2d 731, 736 (9th
Cir. 1963), affg. T.C. Memo. 1961-256), stated:
From the very import of Section 23 [referring to sec.
23(a)(1)(A), the 1939 Code predecessor of sec. 162(a)],
which presupposes that the taxpayer has received taxable
income before deductions can be taken therefrom, it is clear
that Congress intended that the profit or income motive must
first be present in and dominate any taxpayer’s “trade or
business” before deductions may be taken. While the
expectation of the taxpayer need not be reasonable, and
immediate profit from the business is not necessary,
nevertheless, the basic and dominant intent behind the
taxpayer’s activities, out of which the claimed expenses or
debts were incurred, must be ultimately to make a profit or
income from those very same activities. * * * Absent that
basic and dominant motive, the taxpayer’s activities, no
matter how intensive, extensive or expensive, have not been
construed by the Courts as carrying on a trade or business
within the purview of Section 23. * * *
We therefore must determine whether petitioner entered into a
lease with his employer and, if so, whether petitioner entered
into said lease with the intent to make a profit.
During taxable years 2000 and 2001, petitioner did not lease
any other vehicles. Petitioner testified: (1) He did not try to
lease his truck to any other individual; and (2) there was no
formal written lease between himself and his employer.
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