- 7 -
358 (7th Cir. 1987), affg. T.C. Memo. 1985-523; see Dreicer v.
Commissioner, 78 T.C. 642, 645 (1982), affd. without opinion 702
F.2d 1205 (D.C. Cir. 1983). The taxpayer’s expectation, however,
need not be reasonable. Burger v. Commissioner, supra at 358;
Golanty v. Commissioner, 72 T.C. 411, 425 (1979), affd. without
published opinion 647 F.2d 170 (9th Cir. 1981); sec. 1.183-2(a),
Income Tax Regs. Whether the taxpayer has the requisite profit
objective is a question of fact, to be resolved on the basis of
all relevant circumstances, with greater weight being given to
objective factors than to mere statements of intent. Dreicer v.
Commissioner, supra; Golanty v. Commissioner, supra at 426.
The regulations under section 183 provide a nonexclusive
list of factors to be considered in determining whether an
activity is engaged in for profit. The factors include: (1) The
manner in which the taxpayer carries on the activity; (2) the
expertise of the taxpayer or his or her advisers; (3) the time
and effort the taxpayer expended in carrying on the activity;
(4) the expectation that assets used in the activity may
appreciate in value; (5) the taxpayer’s success in carrying on
other activities; (6) the taxpayer’s history of income or loss
with respect to the activity; (7) the amount of occasional
profits, if any, which are earned; (8) the taxpayer’s financial
status; and (9) whether elements of personal pleasure or
recreation are involved. Sec. 1.183-2(b), Income Tax Regs.; see
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