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Petitioner also failed to develop a budget or a business
plan for any of her activities. Although budgets and business
plans are not required, a lack of information upon which to make
educated business decisions tends to belie a taxpayer’s
contentions that an activity was pursued with the objective of
making a profit. Dodge v. Commissioner, T.C. Memo. 1998-89,
affd. without published opinion 188 F.3d 507 (6th Cir. 1999).
A taxpayer’s history of income or losses with respect to the
activity can also indicate whether a profit objective was
present. Sec. 1.183-2(b)(6), Income Tax Regs. Here, petitioner
reported only losses from the activities and never made a profit
from any of them.
Using the same analytic framework set out in the
regulations, it is clear that the Lila Osborne Memorial building
was not held with a profit objective; petitioner did not charge
admission, nor did she charge her brothers rent for their use of
space in the building. She had no tenants. Only two of the
rooms were used for activities that might generate income.
Similarly, it is clear that the free reading room and free
spiritual counseling were offered to the public with no profit
objective. Therefore, we focus the rest of our discussion on the
mortgage and reflexology services offered by petitioner.
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