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B. Reflexology Services
Petitioner studied reflexology, and was well situated to
provide such services based on her many years as a trained and
skilled nursing professional. See sec. 1.183-2(b)(2), Income Tax
Regs. In addition, she did earn some income, however modest,
from the activity. See sec. 1.183-2(b)(6), Income Tax Regs. In
the 2 years at issue, her gross receipts totaled $445. However,
petitioner’s losses have been substantial, totaling $55,301 in
that same period. See id.
The goal of an activity engaged in for profit “must be to
realize a profit on the entire operation, which presupposes not
only future net earnings but also sufficient net earnings to
recoup the losses which have meanwhile been sustained”.
Bessenyey v. Commissioner, 45 T.C. 261, 274 (1965), affd. 379
F.2d 252 (2d Cir. 1967); see also Nissley v. Commissioner, T.C.
Memo. 2000-178; sec. 1.183-2(b)(7), Income Tax Regs. Petitioner
has not demonstrated that she has taken any steps to minimize
losses or increase earnings in order to recoup the sizable losses
she has sustained. Accordingly, we are not persuaded that
petitioner has engaged in this activity with a profit objective
sufficient to satisfy section 183.
Even if we were to have found that petitioner’s reflexology
activity was engaged in for profit, petitioner did not meet her
burden to provide sufficient evidence that the expenses reflected
on her Schedules C were ordinary and necessary for the operation
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