James Castagnetta - Page 8

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          See Gajewski v. Commissioner, 84 T.C. 980, 982 (1985); Johnston             
          v. Commissioner, 25 T.C. 106, 108 (1955).                                   
               Consistent with the manner in which petitioner reported the            
          income and expenses attributable to his gambling activity on his            
          Federal income tax return for the year in issue, petitioner                 
          claims that his gambling activity constitutes a trade or                    
          business.  Respondent argues, in part, that petitioner’s gambling           
          activity does not constitute a trade or business because he did             
          not engage in that activity with the requisite intent to profit.            
               In general, section 162(a) allows a deduction for all                  
          ordinary and necessary expenses paid or incurred during the                 
          taxable year in carrying on a trade or business.  The term “trade           
          or business” is not precisely defined in the Internal Revenue               
          Code or the regulations promulgated thereunder; however, it is              
          well established that in order for an activity to be considered a           
          taxpayer’s trade or business for purposes of section 162, the               
          activity must be conducted “with continuity and regularity” and             
          “the taxpayer’s primary purpose for engaging in the activity must           
          be for income or profit.”  Commissioner v. Groetzinger, 480 U.S.            
          23, 35 (1987).  It is clear that in a single taxable year, a                
          taxpayer may be in engaged in more than one trade or business.              
          Curphey v. Commissioner, 73 T.C. 766 (1980); Barrish v.                     
          Commissioner, T.C. Memo. 1984-602.                                          







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