-2-
162(a).1 We hold that they are not entitled to deduct the
medical expenses under section 162(a) because the compensation to
which the claimed deduction was attributable was not reasonable
in amount. The second issue is whether $5,571 of the medical
expenses is 60 percent deductible under section 162(l). We hold
that it is.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and accompanying exhibits are
incorporated by this reference. Petitioners resided in
Pipestone, Minnesota, at the time they filed the petition.
Petitioner Ronald Francis (Mr. Francis) has operated a farm
(the farm) as a sole proprietorship for 40 years. Petitioner
Judith Francis (Mrs. Francis) assisted Mr. Francis by performing
farm chores, such as milking cows, since Mr. Francis began
operating the farm.
The farm established an employer-provided accident and
health plan for employees (the plan) through an organization
called AgriPlan/BizPlan in 1991. Eligible employees under the
plan would be fully reimbursed by the farm for health insurance
costs for themselves and their families and reimbursed up to
1All section references are to the Internal Revenue Code
effective for 2001, and all Rule references are to the Tax Court
Rules of Practice and Procedure, unless otherwise indicated.
Amounts are rounded to the nearest dollar.
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