Sherman J. Miller and Alice K. Miller - Page 13

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            expenses connected with the condominium.  Since he was an                                 
            insurance agent, he decided that when he was in the Hayward area                          
            he would on occasion speak to a golfing partner or dinner                                 
            companion about insurance and thereby justify deducting the costs                         
            connected with the condominium and his trips to Hayward.                                  
                  We, therefore, sustain respondent's disallowance of                                 
            petitioners claimed travel expenses to the Hayward area from                              
            Roseville.  Because we have concluded that the travel expenses                            
            are not deductible since they were not incurred primarily for                             
            business purposes, we need not address the issue of whether the                           
            expenses were reasonable.1                                                                
                  Next at issue is whether petitioner is entitled to deduct                           
            country club dues during the years at issue.  Section 274                                 
            generally disallows deductions for expenses for entertainment                             
            facilities, unless the taxpayer establishes that the facility was                         
            used primarily for the furtherance of the taxpayer's trade or                             
            business and that the item was directly related to the active                             
            conduct of such trade or business.  Sec. 274(a)(1)(B); sec.                               
            274(a)(2)(C).  In order to show that the facility was used                                
            primarily for the furtherance of a taxpayer's trade or business,                          
            the taxpayer must show that the actual use of the facility during                         

            1  For these same reasons, we also find that petitioners are                              
            not entitled to a deduction under sec. 212.  In order for                                 
            petitioners to be entitled to a deduction under sec. 212, the                             
            predominant purpose and use of the property must not be for                               
            recreation, a hobby, or some other nonprofit motive.  Sec. 1.212-                         
            1(c), Income Tax Regs.                                                                    

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