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Respondent also argues that many of the expenses petitioners
are claiming for business appear to be household expenses, and that
they did not prove that these expenses are ordinary and necessary
business expenses. For example, Mr. Martin claimed expenses for
plumbing, installing a fireplace door, snow removal, pest spraying,
and repair and maintenance of a deck. Mrs. Martin claimed expenses
for sewage and garbage collection and stress training. Respondent
also argues that most of the furniture Mr. Martin purchased for his
home office was more of a personal nature than for business.
Respondent notes that Mr. Martin had no income from his Schedule
C activity during 1989 and 1990.
Section 262 denies a deduction for any personal, living, or
family expenses. With respect to deductions under section 162, the
taxpayer bears the burden of proving that an expense was incurred
for business, rather than personal reasons. Walliser v.
Commissioner, 72 T.C. 433, 437 (1979). Specifically, the taxpayer
must show that the expense was incurred primarily to benefit
his/her business, and there must be a proximate, rather than a
remote or incidental, relationship between the claimed expenses and
the taxpayer's business. Id. In the instant case, petitioners
failed to substantiate that some of the claimed expenses were
incurred primarily to benefit their Schedule C businesses.
Further, we do not find that petitioners used (as required by sec.
280A(c)) that portion of their residence claimed as a home office
either (a) as the principal place of business for their claimed
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