James Castagnetta - Page 9

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               We are satisfied that petitioner’s gambling activity was               
          conducted with the requisite continuity and regularity during the           
          taxable year to allow for treatment as a trade or business within           
          the meaning of section 162(a).  Nevertheless, in order for an               
          activity to be considered a trade or business within the meaning            
          of that section, a taxpayer’s primary purpose fo engaging in the            
          activity must be for income or profit.  See Commissioner v.                 
          Groetzinger, supra; Miller v. Commissioner, T.C. Memo. 1998-463,            
          affd. 208 F.3d 214 (6th Cir. 2000).  Furthermore, as was the                
          situation in Groetzinger, the activity in question must be the              
          taxpayer’s “intended livelihood source”.  Commissioner v.                   
          Groetzinger, supra at 33.                                                   
               The test of whether a taxpayer conducted an activity for               
          profit is whether he or she entered into, or continued, the                 
          activity with an actual or honest objective of making a profit.             
          Keanini v. Commissioner, 94 T.C. 41, 46 (1990); Dreicer v.                  
          Commissioner, 78 T.C. 642, 644-645 (1982), affd. without opinion            
          702 F.2d 1205 (D.C. Cir. 1983); sec. 1.183-2(a), Income Tax Regs.           
          Although a reasonable expectation of profit on a taxpayer’s part            
          is not required, the profit objective must be bona fide, as                 
          determined from a consideration of the surrounding facts and                
          circumstances.  Keanini v. Commissioner, supra; Dreicer v.                  
          Commissioner, supra at 645; Golanty v. Commissioner, 72 T.C. 411,           
          425-426 (1979), affd. without published opinion 647 F.2d 170 (9th           






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