Les B. Martin and Millie A. Martin - Page 12

          testified that he and his wife never belonged to a country club             
          prior to the time he joined Gull Lake Country Club and have not             
          belonged to one since.  He used the country club solely to                  
          entertain business customers, and never on social occasions; his            
          wife and family never used the facilities of the club.  Mr. Martin          
          further testified:                                                          
               frankly, Mrs. Martin did not want to join a country club.              
               We're not country club type people and she was very much               
               against it, always has been against it, still is against               
               it * * *  But after I received some pressure, I said,                  
               hey, it's going to be one way or the other, so I'll join               
               and we'll try it.  And I finally joined it.                            
          We found Mr. Martin's testimony in this regard to be credible.              

               Respondent argues that a one-time club membership is not               
          currently deductible, but is a capital expenditure.  Mercantile             
          Natl. Bank v. Commissioner, 30 T.C. 84 (1958), affd. 276 F.2d 58            
          (5th Cir. 1960).  As a general proposition, we agree that a one-            
          time club membership fee is a capital expenditure because the               
          benefits of the payment will last beyond a 1-year period.  However,         
          here, Mr. Martin both joined and terminated  his membership in the          
          country club in 1989.                                                       
               Because we find that Mr. Martin's expenses and fees in the             
          country club were business expenses, and because Mr. Martin both            
          joined and terminated his country club membership in the same year,         
          we hold that petitioners are entitled to a deduction of $5,020 on           
          Schedule A of their 1989 tax return.                                        

Page:  Previous  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  Next

Last modified: May 25, 2011