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With respect to either section, however, the taxpayer must
demonstrate a profit objective for the activity in order to
deduct associated expenses. See Jasionowski v. Commissioner, 66
T.C. 312, 320-322 (1976); sec. 1.183-2(a), Income Tax Regs. The
profit standards applicable for section 212 are the same as those
used for section 162. See Agro Sci. Co. v. Commissioner, 934
F.2d 573, 576 (5th Cir. 1991), affg. T.C. Memo. 1989-687;
Antonides v. Commissioner, 893 F.2d 656, 659 (4th Cir. 1990),
affg. 91 T.C. 686 (1988); Allen v. Commissioner, 72 T.C. 28, 33
(1979); Rand v. Commissioner, 34 T.C. 1146, 1149 (1960).
Section 1.183-2(b), Income Tax Regs., sets forth nine
nonexclusive factors that should be considered in determining
whether a taxpayer is engaged in a venture with a profit
objective.
In order to show that he was engaged in a trade or business,
petitioner must show not only that his primary purpose for
engaging in the activity was for income or profit but also that
he engaged in the activity with “continuity and regularity”.
Commissioner v. Groetzinger, 480 U.S. 23, 35 (1987).
Respondent’s counsel represented to the Court that he was
not advised by petitioner of the purported business until 10 days
before trial and that petitioner did not provide him with any
evidence of business income and expenses.
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