Berger Chevrolet, Inc. - Page 10

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            companies should be included in the gross income of the                                     
            dealerships, but rather whether the dealerships are entitled to                             
            deduct under section 162(a) the commissions that they paid to                               
            their managers for selling credit insurance.                                                
                  The Government urges us to decide in its favor on the ground                          
            that the compensation (or commissions) paid to the dealerships'                             
            managers for selling the credit insurance is not deductible under                           
            section 162(a) as claimed by petitioners.  In that posture of the                           
            case, we hold for petitioners that such compensation (or                                    
            commissions) is deductible as a business expense under section                              
                  Section 162(a) allows "as a deduction all the ordinary and                            
            necessary expenses paid or incurred during the taxable year in                              
            carrying on any trade or business".  An ordinary expense is one                             
            that is "normal, usual, or customary" in a particular business,                             
            even if it occurs only once.  Deputy v. du Pont, 308 U.S. 488,                              
            495 (1940).  "One of the extremely relevant circumstances is the                            
            nature and scope of the particular business out of which the                                
            expense in question accrued."  Id. at 496.  A necessary expense                             
            is one that is "appropriate and helpful."  Welch v. Helvering,                              
            290 U.S. 111, 113 (1933).  Whether the expense meets the                                    

            they paid to the dealer-related agencies; and (2) commissions                               
            paid by the dealerships to their managers for their role in the                             
            sale of insurance.                                                                          

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