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section 274 have been met. Some of the disputed expenses involve
estimated cash expenditures, expenses relating to apartments in
the ski village of Kitzbuhel, Austria, and in London, England,
and reimbursements made to Diesel Power.
Section 162(a) permits a taxpayer to deduct "ordinary and
necessary expenses paid or incurred during the taxable year in
carrying on any trade or business," including travel and
entertainment expenses. However, even "ordinary and necessary"
expenses must have been incurred on behalf of the taxpayer's
business, not on behalf of another taxpayer's business. Deputy
v. DuPont, 308 U.S. 488 (1940).
Thus, petitioner must first show that his claimed travel and
entertainment expenses were ordinary and necessary and, if so,
petitioner must also show that the expenses were incurred in
furtherance of CTC's business rather than the business of another
taxpayer. Dietrick v. Commissioner, 881 F.2d 336, 339 (6th Cir.
1989), affg. T.C. Memo. 1988-180.
From 1972 through 1977 petitioner owned and operated CTC as
a sole proprietorship. He was also a shareholder (100 percent
until late 1974) as well as a director and chairman of Diesel
Power. During all or part of the earlier years, he was also
involved in various other entities, including WHIP, All Patents,
and IGOS.
Beginning in 1975, and for the remaining years, the
characterization of expenses becomes even more difficult. By
1975 Diesel Power and CTC's business relationship was winding
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