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such returns, and comply with such regulations as the Secretary
may from time to time prescribe.
(a) Claimed Rent Expense
Section 162(a)(3) allows a taxpayer to deduct rental
expenses incurred in connection with a trade or business.
Petitioner argues that in exchange for his use of the RE/MAX
office, he had agreed to pay to RE/MAX 35 percent of any
commissions earned, resulting in a deductible rental expense in
the amount of $3,271.90. To support this assertion, petitioner
introduced into evidence a letter purportedly written by Rosemary
Slade of the RE/MAX office where petitioner worked. With respect
to petitioner's 1993 rent expense, the letter states:
The payments in question are the payments that were
taken out of commissions earned by and applied toward Fixed
Expenses. I have enclosed a copy of your Independent
Contractor Agreement that explains what Fixed Expenses are.
* * * Our agreement with you, stated that 35% of each
commission would be applied to that amount as is documented
on your Ledger Card which I have also enclosed.
The letter then indicates that petitioner paid "fixed expenses"
out of commissions earned in the amount of $3,271.90, as well as
"personal expenses" in the amount of $4,382.48, for combined
total expenses paid to RE/MAX in the amount of $7,654.38 for
1993. Petitioner explained at trial that the term "fixed
expenses", as used in the letter, referred to rent expenses,
while the term "personal expenses" referred to expenses for
secretaries, fax machines, and photocopies, and served as the
primary basis of petitioner's claim for office expenses.
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