-15-
reimbursement in his gross income. See sec. 1.162-17(b), Income
Tax Regs.
At trial, petitioners produced receipts and checks that they
claim represent the expenses they incurred in the course of
petitioner’s business. Respondent argues that the claimed expenses
are neither ordinary nor necessary. For the reasons discussed
below, we agree with respondent.
The record clearly indicates that petitioners attempted to
claim as business expenses those that were personal in nature.
Furthermore, the evidence shows that a portion of the claimed
business expenses were reimbursed either by Westech or Arrowhead.
We hereafter discuss separately each of petitioners’ claimed
business expenses.
1. Advertising
Three of petitioners’ daughters played recreational softball
and soccer. Petitioners deducted $513 in costs associated with
their daughters’ participation in softball and soccer as an
advertising expense. They claim that they sponsored the teams and
in return received advertising space in the team pamphlet.
Petitioners admit that the payment for the claimed expense was
in reality a contribution to the league in which their daughters’
teams competed. We find that this payment was a personal expense,
not a business expense. Petitioners are not entitled to the
claimed 1989 advertising expense.
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