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entitled to a deduction from his personal income for his payment
of the expenses of his corporation; such amounts constitute
either a loan or a contribution to the capital of the corporation
and are deductible, if at all, by the corporation. Deputy v. du
Pont, 308 U.S. 488, 494 (1940); Rink v. Commissioner, 51 T.C.
746, 751 (1969).
Petitioner argues, in the alternative, that the payments are
deductible as an ordinary and necessary expense of petitioner's
law practice because they were incurred to protect petitioner's
professional reputation as an attorney. Petitioner cites two
cases in support of his position.
Petitioner cites Jenkins v. Commissioner, T.C. Memo. 1983-
667, which involved a country music singer who repaid certain
corporate debts to investors of a restaurant business that he had
promoted. The Court allowed the taxpayer to deduct the payments
as a section 162 expense of his business as a country singer,
even though the taxpayer had no obligation to repay the loans.
The Court reasoned that the payments were necessary to protect
the taxpayer's personal business reputation, noting that many of
the investors were connected with the country music industry.
Similarly, in Lutz v. Commissioner, 282 F.2d 614 (5th Cir. 1960),
a shareholder of a corporation was allowed to deduct expenses
that he paid on behalf of three corporations, even though he had
no legal obligation to do so. The Court of Appeals held that the
failure to make these payments might have jeopardized the
taxpayer's licenses in his principal business as a produce buyer
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