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current existence) of the various insurance policies of the
owner-operators. Therefore, it makes sense to try to cover as
many as possible by blanket policies, under which insurance
companies require that the insured have an ownership interest in
the vehicle, which in turn is satisfied by the lease arrangement.
However, in most if not all cases, the owner-operators pay for
this insurance by having its cost deducted from their hauling
proceeds.
Accordingly, we conclude that for income tax purposes the
lease arrangements with the carriers had no independent economic
significance, all the income the owner-operators received from
the carriers was wage income, and the expenses pertaining to the
operation of the trucks are deductible as itemized deductions on
Schedule A, subject to the limitations of section 67(a).
To reflect the foregoing,
Decisions will be entered
under Rule 155.
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Last modified: May 25, 2011