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specifically the formulation work, and also analytical work
which involves instruments. I have instruments that were--
for the--analyzes for handling chemicals in drugs solutions.
THE COURT: How long will it take you to produce these
drugs, this drug?
THE WITNESS: It’s very hard to say because research and
development can fail easily * * *.
Petitioner earned no income from these endeavors for the
years before the Court, and it does not appear that he has ever
realized income from this work, except when employed by a
pharmaceutical company.
Discussion
Section 162(a) allows a deduction for ordinary and necessary
expenses paid or incurred in carrying on a trade or business.
Petitioner claims to be in the trade or business of research, and
we are, therefore, faced with the initial question of whether he
is in a trade or business within the meaning of section 162. In
Commissioner v. Groetzinger, 480 U.S. 23, 35 (1987), the Supreme
Court held that “if one’s * * * activity is pursued full time, in
good faith, and with regularity, to the production of income for
a livelihood, and is not a mere hobby, it is a trade or
business”. We are willing to assume that petitioner did devote
hours in research with some degree of regularity. We are not
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