-8- Section 162(a) authorizes deductions for ordinary and necessary expenses paid during the taxable year in carrying on a trade or business. However, section 262 generally precludes deductions for personal expenses. Thus, expenses incurred by a taxpayer in commuting between his or her home and place of business are personal and nondeductible. Commissioner v. Flowers, 326 U.S. 465, 473-474 (1946); secs. 1.162-2(e), 1.262- 1(b)(5), Income Tax Regs.2 Moreover, section 274(d)(4) provides that no deduction is allowable with respect to listed property, as defined in section 280F(d)(4), unless the deduction is substantiated in accordance with the strict substantiation requirements of section 274(d) and the regulations promulgated thereunder. Included in the definition of listed property in section 280F(d)(4) is any passenger automobile. Sec. 280F(d)(4)(A)(i). In order to substantiate a deduction attributable to listed property, a taxpayer must maintain adequate records or present corroborative evidence to show: (A) The amount of the expense or use, (B) the time and place of the expenditure or use of the listed property, and (C) the business purpose for the expenditure or use. Sec. 1.274-5T(b)(6), Temporary Income Tax Regs., 50 Fed. Reg. 46016 (Nov. 6, 1985). 2 In contrast, expenses incurred in traveling between two places of business are deductible. Heuer v. Commissioner, 32 T.C. 947, 953 (1959), affd. per curiam 283 F.2d 865 (5th Cir. 1960).Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011