- 7 -
never paid his fee. Thus, petitioner contends that he is
entitled to a bad debt deduction for this amount. We disagree.
On this record, there is no evidence whatsoever to support a
finding that petitioner included in gross income the $2,626 in
unpaid fee in either 1991, the year for which the deduction as a
bad debt was claimed, or for a prior taxable year. Thus, because
we find that petitioner did not include the $2,626 in income,
petitioner is not entitled to a bad debt deduction under section
166. Gertz v. Commissioner, supra.
Finally, we must decide whether petitioner is entitled to a
deduction for rental payments for petitioner's house in Delhi in
the amount of $4,800. Although petitioner claimed the rental
payments on his Schedule C for Boozer, petitioner's management
consultant business, petitioner contends that the rental payments
were related to his mental health therapy business. Petitioner
never explained why he failed to claim the rental payments on his
Schedule C for Paradise, his mental health therapy business.
Section 162 allows a deduction for ordinary and necessary
traveling expenses (including amounts expended for meals and
lodging) incurred by a taxpayer while away from home in the
pursuit of a trade or business. This provision is an exception
to the general rule under section 262 which states that personal,
living, or family expenses are not deductible. Under section
162, a taxpayer must satisfy all of the following conditions:
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