- 5 - Helvering, 290 U.S. 111, 115 (1933). Section 162(a) allows taxpayers a deduction for "all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business". In order to be deductible, however, the expenses must be "directly connected with or pertaining to the taxpayer's trade or business". Sec. 1.162-1(a), Income Tax Regs. For convenience, we will combine our findings of fact and opinion with respect to the items which remain in issue. Charitable Contributions Subject to limitation, section 170 permits a deduction for charitable contributions paid within the taxable year. Sec. 170(a) and (b). Petitioners claimed charitable contributions on their 1985 Federal income tax return in the amount of $6,364. This amount consisted of noncash contributions of $4,184 and cash contributions of $2,180. Respondent allowed the noncash contributions in full, but denied $1,127 of the cash contributions because of a lack of adequate substantiation. At trial, petitioners produced four canceled checks totaling $402.50. Three of these checks were made payable to a "Christmas Bazaar". Petitioners failed to offer any testimony to demonstrate that these expenditures were charitable contributions. The fourth check was made payable to the Lupus Foundation in the amount of $100. The Commissioner has recognized the Lupus Foundation as a charitable organizationPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011