Anke Lunsmann-Nolting - Page 12

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          petitioner’s general reluctance to advertise the availability of            
          the cottage, indicates a lack of profit objective.                          
               Petitioner did not withdraw from her job as assistant dean             
          of CUMC to pursue the rental real estate activity.  Petitioner              
          received a salary from CUMC and access to an on-campus apartment            
          from CUMC.  To the extent that petitioner expended time and                 
          effort in Maine, the focus of her efforts was not to rent out the           
          cottage but to plan and build a research laboratory on her                  
          Victorian house property for the benefit of CUMC.  Petitioner               
          testified that she was planning to use the cottage as an                    
          incentive for scientists with families to come and work at the              
          laboratory.                                                                 
               For an activity to constitute a trade or business, “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).  Even though petitioner testified that she intended to           
          charge the scientists rent, her primary objective was not to make           
          a profit.  Rather, the evidence is more consistent with the                 
          conclusion that petitioner wished to further the objective of her           
          job; i.e., fundraising.                                                     
               The Court sustains respondent’s determination that                     
          petitioner did not engage in the activity for profit within the             
          meaning of section 183(c).  Petitioner is not entitled to claim a           
          deduction for real property taxes paid in 2002 for lot No. 126 on           
          Schedule E, but she is entitled to claim a deduction for such               




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