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Rinker did not timely respond to respondent’s requests for admission.
Dr. Rinker also argues that respondent’s first request for
admission--that Mr. Davis’s photography activities were not
entered into for profit--is improper because it requests
admission of a matter of law, not fact. That is not correct.
Whether a taxpayer is primarily engaged in an activity for profit
is a question of fact to be resolved from all relevant facts and
circumstances. King v. Commissioner, 116 T.C. 198, 205 (2001);
Golanty v. Commissioner, 72 T.C. 411, 426 (1979), affd. per
curiam without published opinion 647 F.2d 170 (9th Cir. 1981).
At no point did petitioners request that the Court extend
the time for responding to respondent’s requests. Nor did either
petitioner move to withdraw or modify the deemed admissions
despite ample opportunity to do so. The matters in respondent’s
requests for admission are therefore deemed admitted.5
II. Business Deductions for Dr. Rinker
A. Generally
Petitioners claimed $102,265 of business expenses for Dr.
Rinker’s medical practice on Schedule C of their 1999 return.
5 We do note, however, that in the notice of deficiency,
respondent allowed $5,700 of deductions for Mr. Davis’s
photography expenses--an amount which fully offset his claimed
income from photography. Respondent also adjusted Dr. Rinker’s
gross receipts to the amount in the requests for admission solely
on the basis of records created and maintained by Dr. Rinker.
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