-8-
records and has adequately reconstructed the expenditures. Sec.
1.274-5T(c)(5), Temporary Income Tax Regs., supra.
Petitioners claimed Schedule C business expenses of $33,547
for each of the years 2000 and 2001. Section 162 provides for
deduction of all ordinary and necessary business expenses paid or
incurred during the taxable year in carrying on a trade or
business. For petitioner’s ministerial activity to qualify as a
trade or business, his dominant or primary objective of the
venture must be to earn a profit. Hildebrand v. Commissioner, 28
F.3d 1024, 1027 (10th Cir. 1994), affg. Krause v. Commissioner,
99 T.C. 132 (1992). Petitioners offered no evidence to establish
a profit motive for petitioner’s ministerial activities. To the
contrary, petitioner admits that he receives no compensation for
his ministerial services, yet incurs substantial expenses for
those services. On these facts, we conclude that petitioner’s
ministerial activities were not engaged in for profit and that
his expenses related to those activities are not deductible under
section 162 or section 183 (given that petitioners had no income
from these activities for 2000 or 2001).4 See Luellen v.
Commissioner, T.C. Memo. 1994-449; Anderson v. Commissioner, T.C.
Memo. 1984-59.
4 Of course, petitioner’s failure to substantiate expenses
related to his ministerial activities would also preclude
deductability of those expenses.
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