Austin L. Mitchell and Rebecca A. Mitchell - Page 9

                                        - 9 -                                         
          Commissioner, 908 F.2d 369, 373 (8th Cir. 1990), revg. T.C. Memo.           
          1988-468; Antonides v. Commissioner, 91 T.C. 686, 693-694 (1988),           
          affd. 893 F.2d 656 (4th Cir. 1990); Dreicer v. Commissioner, 78             
          T.C. 642, 645 (1982), affd. without opinion 702 F.2d 1205 (D.C.             
          Cir. 1983).                                                                 
               The expectation of profit need not have been reasonable.               
          The taxpayer must have entered into the activity or continued it,           
          however, with the profit motive.  Hulter v. Commissioner, 91 T.C.           
          371, 393 (1988); sec. 1.183-2(a), Income Tax Regs.  Whether a               
          taxpayer has the requisite profit motive is determined on the               
          basis of all surrounding facts and circumstances.  Dreicer v.               
          Commissioner, supra at 645; sec. 1.183-2(b), Income Tax Regs.               
          We give greater weight to objective facts than to a taxpayer’s              
          statements of intent.  Dreicer v. Commissioner, supra at 645;               
          sec. 1.183-2(a), Income Tax Regs.                                           
               Before we address whether petitioner had the requisite                 
          profit motive based on the facts and circumstances, we first must           
          address two threshold issues.  First, whether petitioner’s tree             
          planting, mature timber harvesting, and haying undertakings may             
          be treated as one activity.  Second, whether petitioner is                  
          entitled to the presumption of a profit motive.                             











Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011