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York City was extremely expensive; and that he used the car
solely for business to transport clients. Given the availability
of mass transportation in New York City, the constant traffic
congestion, and the high cost of, as well as the restrictions on,
parking, we find highly persuasive petitioner's testimony that he
did not use his car for commuting.
At trial, respondent conceded that for 1979 and 1980,
petitioner substantiated automobile expenses of at least $3,162
and $1,739 respectively. Thus, on the basis of the entire
record, we hold that petitioner may deduct $3,162 in 1979 and
$1,739 in 1980.
B. Sailboat
Respondent determined that for 1979 and 1980 petitioner is
not entitled to deduct any expenses incurred in connection with
the ownership and operation of the Blue Chip, because he failed
to establish that the expenses he incurred in connection with the
boat were ordinary and necessary under section 162. Petitioner
asserts that he used the boat solely for business purposes;
therefore, he contends that his deductions for the taxable years
in issue are fully allowable. However, section 162 does not
control this issue.
For tax years beginning in 1979, section 274(a)(1)(B)
strictly disallows the deduction, otherwise allowable, of an item
with respect to a facility used for, or in connection with,
entertainment as defined in section 274(a)(1)(A), such as a boat.
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