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burden of proving otherwise. Rule 142(a); Welch v. Helvering,
290 U.S. 111, 115 (1933). Moreover, petitioner must prove
entitlement to any deduction claimed. New Colonial Ice Co. v.
Helvering, 292 U.S. 435, 440 (1934).
The issue before us is whether petitioner is entitled to
accrue $15,000 as a deduction for 1991. We hold that he is not
because he failed to prove that he incurred that expense.
Section 162(a) permits the deduction of ordinary and
necessary expenses paid or incurred during the taxable year in
carrying on a trade or business. The question of whether a
taxpayer is engaged in the active conduct of a trade or business
requires an examination of all relevant facts and circumstances.
Commissioner v. Groetzinger, 480 U.S. 23, 36 (1987). To be
deductible under section 162, expenses must relate to a trade or
business functioning at the time the expenses are incurred.
Hardy v. Commissioner, 93 T.C. 684, 687 (1989), affd. on this
point in an unpublished order of the Court of Appeals for the
Tenth Circuit filed October 29, 1990. Further, the expense must
have been incurred after the taxpayer’s trade or business
actually commenced; expenses incurred prior to that time are
nondeductible pre-opening expenses. Jackson v. Commissioner, 86
T.C. 492, 514 (1986), affd. 864 F.2d 1521 (10th Cir. 1989);
Goodwin v. Commissioner, 75 T.C. 424, 433 (1980), affd. without
published opinion 691 F.2d 490 (3d Cir. 1982); McManus v.
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