Richard A. Stasewich - Page 12

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          business (essentially as a form of advertising or promotional               
          expense).  The basis for this contention is that his socializing            
          at art functions and his activity as an artist afforded him an              
          opportunity to meet potential clients and promote his accounting            
          practice.                                                                   
               To prevail on this theory, petitioner must show that the               
          expenditures were made primarily for business purposes.  Hahn v.            
          Commissioner, T.C. Memo. 1979-429.  Also, it must be shown that             
          there is a proximate rather than a remote or incidental                     
          relationship between the expenditures and the business concerned.           
          Henry v. Commissioner, 36 T.C. 879 (1961); Boomershine v.                   
          Commissioner, T.C. Memo. 1987-384; Hahn v. Commissioner, supra.             
          The mere fact that engaging in an activity affords contact with             
          possible future customers or clients is in and of itself                    
          insufficient to justify deducting the cost of the activity as a             
          business expense.  Hahn v. Commissioner, supra.                             
               Petitioner has not shown a business purpose for the                    
          expenditures or that there was a proximate relationship between             
          the expenditures from his artist activity and his accounting                
          business.  Accordingly, none of these expenditures are deductible           
          under section 162 as ordinary and necessary business expenses of            
          his accounting business.                                                    
               Substantiation                                                         
               Although petitioner's artist activity was "not engaged in              
          for profit" within the meaning of section 183(c), petitioner may            




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