- 4 - Section 162 generally allows a deduction for all ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business. Such expenses must be directly connected with or pertain to the taxpayer’s trade or business. Sec. 1.162-1(a), Income Tax Regs. Whether a taxpayer’s activities constitute the carrying on of a trade or business is a question of fact requiring an examination of the particular facts and circumstances of each case. Commissioner v. Groetzinger, 480 U.S. 23, 36 (1987). We decide whether petitioner has established that she engaged in a trade or business in 2002 on a preponderance of the evidence. In order to establish that he or she was engaged in a trade or business, the taxpayer must be continuously and regularly involved in the activity for the primary purpose of making a profit. Id. at 35. “While the focus of the test for whether a taxpayer engaged in an activity with the intention of making a profit is on the subjective intention of the taxpayer, greater weight is given to the objective facts than is given to the taxpayer’s mere statement of his intent.” Wesley v. Commissioner, T.C. Memo. 2007-78; see also sec. 1.183-2(a), Income Tax Regs. Petitioner claims that she was engaged in an event-planning business in 2002. Petitioner provided some documents in an attempt to demonstrate that she operated a business and toPage: Previous 1 2 3 4 5 6 7 8 9 NextLast modified: November 10, 2007