- 6 - Mr. Vitale operated Sussex Farm before the sponsorship arrangement began in 1986, and he continues even today to operate Sussex Farm. We believe that petitioner's 1982 resolution authorizing petitioner's sponsorship of Sussex Farm was a halfhearted attempt to legitimize as a corporate deduction the payment of Mr. Vitale's personal expenses. In fact, Mr. Vitale did not even follow the terms of his corporation's resolution. Although the resolution authorizing the sponsorship was predicated, in large part, on selecting horse names that refer to petitioner's products (e.g., "Ice Free Nogarro, Ice Free Nobella, and Ice Free Czest"), no such horse names ever were selected. Because the primary purpose of the corporate sponsorship was to benefit Mr. Vitale personally, petitioner's deductions were not proximately related to the operation of its business. Mr. Vitale's ownership of a horse farm during the 1970's, his activity in several equestrian organizations, his authorship of articles on horse breeding, and his testimony at trial demonstrate that he has an ardent and longstanding interest in horses. Mr. Vitale would have pursued his equestrian activities whether or not petitioner "sponsored" his horses. We conclude that Mr. Vitale created this sponsorship arrangement in an effort to allow petitioner to pay (and deduct) all net expenses associated with his equestrian activities. C. Qualification of Expenses as "Necessary" Deductions are not "necessary" unless the taxpayer establishes that they are appropriate and helpful to its business. Carbine v. Commissioner, 83 T.C. 356, 363 (1984), affd. 777 F.2d 662 (11th Cir. 1985). In attempting to make this showing, Mr. Vitale made three claims: (1) Petitioner's name was announced over loudspeakers at horse shows as the sponsor of Sussex Farm's horses; (2) petitioner placed printed advertisements in the programs of a couple of shows; and (3) petitioner received a request for a price quotationPage: Previous 1 2 3 4 5 6 7 8 9 10 Next
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