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of this case, petitioner was not the owner of the residences of
its relocating employees for Federal income tax purposes in
either regular or assigned sales.
Having decided that petitioner is not the owner of the
homes, we decide petitioner is entitled to deduct the payments to
the RSC under section 162(a) as ordinary and necessary business
expenses. An ordinary and necessary expense is one that is
appropriate and helpful to the taxpayer's business and that
results from an activity which is a common and accepted practice.
Boser v. Commissioner, 77 T.C. 1124, 1132 (1981). Section 162(a)
permits a deduction for reasonable compensation, including
employee benefits. Sec. 1.162-10(a), Income Tax Regs.
Petitioner relocated its employees to satisfy business needs and
provided home disposal assistance to induce its employees to
accept its offer of relocation. Petitioner's competitors in the
mainframe computer business provided similar assistance to their
employees. The payments to the RSC are similar to reimbursement
of moving costs which are deductible business expenses.
Respondent did not dispute that in the event we found petitioner
not to be the owner of the residences of its relocating
employees, the payments to the RSC were ordinary and necessary
business expenses. We find that the payments to the RSC
conferred employee benefits to relocating employees and are
deductible business expenses under section 162(a).
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