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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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