- 7 - to the sale or rental of the Harwichport property. Petitioner responded with cancelled checks payable to various newspapers, but he produced no advertisements. The only advertisements produced at trial were obtained by respondent. We find that the Harwichport property was not available for rent in 1990 and that the property was not available for sale prior to October 28, 1990. We conclude that petitioner's activity on the Harwichport property did not constitute a trade or business in 1990. Petitioner's level of activity and attempted disposition of the Harwichport property indicate that petitioner prepared the Harwichport property for resale during the year in issue. We conclude that petitioner held the Harwichport property for the production of income in 1990. In general, deductions incurred for the production of income under section 212 are subject to the same requirements and restrictions that apply to a trade or business expense deduction under section 162. Estate of Davis v. Commissioner, 79 T.C. 503, 507 (1982); Hubbart v. Commissioner, 4 T.C. 121, 124 (1944). In order to be deductible, the expenditures must be ordinary and necessary. Secs. 162(a), 212. Petitioner must prove a proximate connection between the expenditure and the conduct of a profit- seeking activity. Larrabee v. Commissioner, 33 T.C. 838, 841 (1960). In general, an expenditure made primarily to secure a personal benefit is not deductible, sec. 262; whereas, a similar expenditure may be deductible if made primarily for a profit-Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
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