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Income Tax Regs. If a trip is primarily personal in nature,
expenses are not deductible even if the taxpayer engaged in some
business activities at the destination. Id. Whether travel is
related primarily to the taxpayer's trade or business or is
primarily personal is a question of fact. Sec. 1.162-2(b)(2),
Income Tax Regs.; see also Holswade v. Commissioner, 82 T.C. 686,
698, 701 (1984). The amount of time during the period of the
trip that is spent on personal activity, compared to the amount
of time spent on activities directly relating to the taxpayer's
trade or business, is an important factor in determining whether
the trip is primarily personal. Holswade v. Commissioner, supra.
The taxpayer must prove that the trip was primarily related to
the trade or business. Rule 142(a).
Petitioners contend that the Orlando trip was primarily
related to petitioner husband's business as a real estate broker,
and, therefore, the $905 automobile rental expense should be
deductible on Schedule C of their return as a trade or business
expense. Petitioners contend further that any sightseeing and
other personal activities engaged in during the trip were purely
incidental. Respondent contends that the Orlando trip was not
primarily related to petitioner husband's trade or business as a
real estate broker, and, therefore, the automobile rental expense
is not deductible.
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Last modified: May 25, 2011