-52-
"Necessary" has been construed to mean "appropriate" or
"helpful", not "indispensable" or "required". Ford v.
Commissioner, 56 T.C. 1300, 1306 (1971), affd. 487 F.2d 1025 (9th
Cir. 1973). It is sufficient if "there are also reasonably
evident business ends to be served, and the intention to serve
them appears adequately from the record." B. Manischewitz Co. v.
Commissioner, 10 T.C. 1139, 1145 (1948). The substantiated
expenses were also necessary, in that they were incurred with the
intention of serving the business end, mainly the conduct of a
business school in Russia.
Petitioners are entitled to deduct $20,033 as ordinary and
necessary expenses of the business school on their 1991
Schedule C.
Unreported Income--Chorny
Respondent determined that petitioners failed to report
Schedule C income of $20,472 and $9,250 in 1990 and 1991,
respectively.
At trial, petitioner testified that the payments received
from Chorny represented loan repayments. As evidence of the
debt, petitioners offered reproductions of checks payable to
Chorny or Margarita Chorny.
We are not persuaded by the checks payable to the Chornys
that Chorny was indebted to petitioner or that the checks
petitioner received during 1990 and 1991 from Chorny were not
includable in petitioners' income. At the trial of this case,
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