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In pertinent part, section 162(a) provides: "There shall be
allowed as a deduction all the ordinary and necessary expenses
paid or incurred during the taxable year in carrying on any trade
or business". To qualify for deduction under section 162(a), an
item must (1) be paid or incurred during the taxable year, (2) be
for carrying on any trade or business, (3) be an expense, (4) be
a necessary expense, and (5) be an ordinary expense. INDOPCO,
Inc. v. Commissioner, supra at 85.
Mr. Clawson received $60,000 and $100,000 from petitioner to
distribute on petitioner's behalf at the 1989 and 1990 food
shows, respectively. Petitioner provided bookkeeping entries
that indicate that Mr. Clawson distributed $35,616 and $82,958 to
representatives of the member stores at the 1989 and 1990 food
shows, respectively. In addition, Mr. Clawson testified that he
distributed such money to the shareholders of the member stores.
Mr. Clawson indicated that he made the cash payments to encourage
petitioner's shareholders to purchase Western products from
petitioner. We hold that petitioner has substantiated its
entitlement to a deduction for the amounts distributed by Mr.
Clawson at the 1989 and 1990 food shows. Associated Milk
Producers, Inc. v. Commissioner, 68 T.C. 729 (1977); sec. 1.162-
1(a), Income Tax Regs.11
11 On brief petitioner did not argue that food show cash
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