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that the amounts at issue are deductible as ordinary and
necessary business expenses under section 162.
The term "capital assets" is defined by section 1221
as follows:
For purposes of this subtitle, the term
"capital asset" means property held by the
taxpayer (whether or not connected with his
trade or business), but does not include--
(1) stock in trade of the taxpayer
or other property of a kind which would
properly be included in the inventory
of the taxpayer if on hand at the close
of the taxable year, or property held
by the taxpayer primarily for sale to
customers in the ordinary course of his
trade or business;
(2) property, used in his trade or
business, of a character which is
subject to the allowance for
depreciation provided in section 167,
or real property used in his trade or
business;
(3) a copyright, a literary,
musical, or artistic composition, a
letter or memorandum, or similar
property, held by--
(A) a taxpayer whose
personal efforts created such
property,
(B) in the case of a
letter, memorandum, or
similar property, a taxpayer
for whom such property was
prepared or produced, or
(C) a taxpayer in whose
hands the basis of such
property is determined, for
purposes of determining gain
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Last modified: May 25, 2011