-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