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of expenses petitioners incurred while on a trip to Europe in
2001 and of research expenses, all related to the proposed WWI
book. In support of his claimed deductions, Mr. Deward provided
a letter from a publisher, Military History Press L.L.C., dated
August 15, 2005, saying that they would like to review his
materials “with an eye to future publications”. Mr. Deward also
provided a document titled “The Development of Military Doctrine
by the German and British Armies During the Course of the Great
War” which he presented to his local chapter of the “Great War
Society” in September 2006.
Discussion
Section 162(a) generally allows a deduction for all ordinary
and necessary expenses paid or incurred during the taxable year
in carrying on a trade or business. What constitutes a trade or
business is not statutorily defined; rather, it requires an
examination of the facts in each case. Commissioner v.
Groetzinger, 480 U.S. 23, 36 (1987). To be engaged in a trade or
business, the taxpayer must be involved in the activity with
continuity and regularity, and the taxpayer’s primary purpose for
engaging in the activity must be for income or for profit. Id.
at 35.
Respondent alleges that as of the close of 2001, Mr. Deward
had not begun the actual writing of his book on WWI, nor had he
created an outline. Respondent argues that Mr. Deward was,
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