James Lawton Robertson and Lillian Janette Humber Robertson - Page 9

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          are substantiated by the employee, and (3) the employee returns any         
          amounts in excess of expenses.  Sec. 1.62-2(d)-(f), Income Tax              
          Regs.  The matter herein concerns only the first prong; namely,             
          whether the reimbursed expenses have a business connection and              
          would otherwise be deductible.                                              
               Section 162(a) allows as a deduction ordinary and necessary            
          expenses incurred during the taxable year in carrying on a trade or         
          business.  Such expenses include traveling expenses (including              
          meals and lodging) while away from home in the pursuit of a trade           
          or business.  Sec. 162(a)(2).  Generally, for Federal tax purposes          
          a taxpayer's home under section 162(a)(2) is his principal place of         
          business.  Mitchell v. Commissioner, 74 T.C. 578, 581 (1980); Daly          
          v. Commissioner, 72 T.C. 190, 195 (1979), affd. 662 F.2d 253 (4th           
          Cir. 1981); Kroll v. Commissioner, 49 T.C. 557, 561-562 (1968).  If         
          a taxpayer maintains two businesses, this Court has determined the          
          taxpayer's home from three objective factors: (1) The place where           
          he spends more of his time; (2) the place where he engages in               
          greater business activity; and (3) the place where he derives a             
          greater proportion of his income.  Hoeppner v. Commissioner, T.C.           
          Memo. 1992-703; see also Gardin v. Commissioner, 64 T.C. 1079               
          (1975); Montgomery v. Commissioner, 64 T.C. 175 (1975), affd. 532           
          F.2d 1088 (6th Cir. 1976).                                                  
               Exclusions and deductions from income are a matter of                  
          legislative grace and are narrowly construed.  INDOPCO, Inc. v.             

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