Roberts v. Commissioner

POSNER, Circuit Judge.

The Internal Revenue Code allows a taxpayer to deduct “all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.” 26 U.S.C, § 162(a). But if the activity giving rise to the expenses “is not engaged in for profit,” section 183 permits deduction .of expenses incurred in the activity “only to the extent that the gross income derived from such activity [i.e., the not-for-profit activity] for the taxable year exceeds the deductions.” 26 U.S.C. § 183(a), (b)(2). The activities governed by section 183 are usually…