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our decision: (1) The manner in which the taxpayer carries on
the activity; (2) the expertise of the taxpayer or his advisers;
(3) the time and effort expended by the taxpayer in carrying on
the activity; (4) the expectation that assets used in the
activity may appreciate in value; (5) the success of the taxpayer
in carrying on other similar or dissimilar activities; (6) the
taxpayer’s history of income or losses with respect to the
activity; (7) the amount of occasional profits, if any, which are
earned; (8) the financial status of the taxpayer; and (9) the
elements of personal pleasure or recreation. Sec. 1.183-2(b),
Income Tax Regs.
Not all of the factors listed above are applicable to
the facts of this case. We focus on only those factors
that are relevant.
1. The Manner in Which the Taxpayer Carries On the Activity
The fact that the taxpayer carries on the activity in a
businesslike manner may indicate that the activity is engaged in
for profit. Elliott v. Commissioner, supra at 972; Engdahl v.
Commissioner, 72 T.C. 659, 666 (1979); sec. 1.183-2(b)(1), Income
Tax Regs. Relevant indicators include maintaining complete and
accurate books and records, obtaining a business license,
maintaining a separate business bank account, developing a
written business plan, having a plausible strategy for earning a
profit, and attempting changes in order to improve profitability.
See Morley v. Commissioner, T.C. Memo. 1998-312; Holowinski v.
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