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taxable year 1991, respondent disallowed the deductions for the
tax return preparation fees and the real estate license fee.
Section 162(a) allows a deduction for "all the ordinary and
necessary expenses paid or incurred during the taxable year in
carrying on any trade or business". An employee, however, is not
entitled to a deduction for an expense if the employee has a
right of reimbursement from his employer, because the employee's
expenditure is not "necessary". Heidt v. Commissioner, 274 F.2d
25, 28 (7th Cir. 1959), affg. T.C. Memo. 1959-31; Lucas v.
Commissioner, 79 T.C. 1, 7 (1982).
Petitioner is not entitled to deduct the expenses he
incurred as an employee under section 162. As we stated in Stolk
v. Commissioner, 40 T.C. 345, 356 (1963), affd. per curiam 326
F.2d 760 (2d Cir. 1964): "These charges were business expenses of
the * * * [corporations] and petitioner cannot convert * * * [the
corporate] expenses into his own by failing to claim repayment,
even though paid by him." See also Orvis v. Commissioner, 788
F.2d 1406 (9th Cir. 1986), affg. T.C. Memo. 1984-533; Coplon v.
Commissioner, 277 F.2d 534 (6th Cir. 1960), affg. T.C. Memo.
1959-34. Petitioner argues, in the alternative, that the
employee business expenses are deductible pursuant to section 212
as expenses incurred in his capacity as an investor. A
shareholder, however, is not entitled to a deduction from his
individual income for the payment of corporate expenses. Deputy
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