Dora Margaret Benson - Page 6




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         of limitations on assessment had expired on her 2002 taxable                 
         year.                                                                        
              Generally, an income tax must be assessed within 3 years                
         after the applicable return is filed.  Sec. 6501(a).  In this                
         case, petitioner timely filed her 2002 Federal income tax return             
         on April 15, 2003.  April 15, 2006, was 3 years after that date.             
         As the notice of deficiency was sent on January 25, 2006, the                
         period of limitations on petitioner’s 2002 taxable year remained             
         open at the time the notice was sent.4                                       
         III.  Petitioner’s Lack of Profit Objective                                  
              Section 183 specifically precludes deductions for activities            
         not engaged in for profit except to the extent of the gross                  
         income derived from such activities.  Sec. 183(a) and (b)(2).                
         Given that petitioner had gross receipts of only $445 for the 2              
         years at issue, the remainder of her Schedule C expenses are only            
         deductible if we find that petitioner engaged in her activities              
         with the requisite profit objective.  For reasons discussed more             
         fully below, we find that petitioner was not engaged in the                  
         activities at issue with the necessary profit objective, and                 
         consequently, we hold for respondent.                                        



               4  See also sec. 6501(h) as it relates to petitioner’s loss            
          carryforward, discussed infra, and sec. 6503(a)(1) regarding                
          suspending the running of the period of limitations upon the                
          issuance of a notice of deficiency and filing of a petition for             
          redetermination.                                                            






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