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1.162-2(a), Income Tax Regs. If travel expenses are incurred for
both business and other purposes, the travel expenses are
deductible only if the travel is primarily related to the
taxpayer's trade or business. Sec. 1.162-2(b)(1), Income Tax
Regs. If a trip is primarily personal in nature, the travel
expenses incurred are not deductible even if the taxpayer engages
in some business activities at the destination. Sec. 1.162-
2(b)(1), Income Tax Regs. Whether travel is related primarily to
the taxpayer's trade or business or is primarily personal is a
question of fact. See Holswade v. Commissioner, 82 T.C. 686,
698, 701 (1984).
Petitioner states that he originally purchased the
condominium as an investment, but when he had difficulty renting
it, he decided in 1987 to convert the condominium to business use
as lodging when he traveled to Hayward. Petitioner testified
that it was difficult to find a hotel room in Hayward during his
visits there. However, he also stated that he had not been in
business in Hayward until 1987, when he decided to use the
condominium in his insurance business.
Petitioner called his business activity in Hayward
"prospecting". He said that he used two primary methods of
prospecting, which were direct mail and "sunshining", and that
the method he used in Hayward was "sunshining". "Sunshining",
according to petitioner, was meeting people who would be likely
candidates for purchasing insurance. Petitioner stated that a
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