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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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