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she resided. Mr. Popov explained that his father was unable to
perform these tasks.
Mr. Popov flew to Bulgaria to place advertisements in
newspapers advertising his business in Sofia and in larger cities
outside of Sofia. Mr. Popov also wanted to establish an office
in Bulgaria to facilitate the payment procedures. Mr. Popov
testified that he had to go to Bulgaria to do all of this in
person, since Bulgaria does not have a banking system and most
transactions are done in cash.
In Bulgaria, Mr. Popov stayed at the family apartment with
his father for 1 month. His mother was in the United States at
the time for a 3-month visit with petitioners. Mr. Popov did a
substantial amount of traveling in Bulgaria and placed numerous
advertisements for the dating service in newspapers in both Sofia
and other cities.
Taxpayers may deduct travel expenses if the expenses are
reasonable and necessary and bear a reasonable and proximate
relationship to the business activity. Kinney v. Commissioner,
66 T.C. 122, 126 (1976); McKinney v. Commissioner, T.C. Memo.
1981-181, modified T.C. Memo. 1981-377, affd. 732 F.2d 414 (10th
Cir. 1983). If travel expenses are incurred for both business
and other purposes, the expenses are deductible only if the
travel is primarily related to the taxpayer’s trade or business.
Sec. 1.162-2(b)(1), Income Tax Regs. If a trip is primarily
personal in nature, the travel expenses are not deductible even
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