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have held that in certain limited circumstances a taxpayer may
deduct the expenses of another taxpayer. See Lohrke v.
Commissioner, 48 T.C. 679, 688 (1967). For the application of
our holding in Lohrke, we must first ascertain K&H’s motive for
paying Snacks’ operating expenses and then determine whether it
was in furtherance or promotion of K&H’s trade or business. See
id.
Our consideration of whether the advances here were debt or
equity and business or nonbusiness debts covered the question of
whether the advances were to promote K&H or whether they were
investment in Snacks. That is the same inquiry that is called
for under the above-stated Lohrke standard. Because K&H’s
relationship with Snacks was to secure additional business and
profits for K&H, it follows that K&H’s payment of Snacks’
operating expenses in this limited setting would be deductible by
K&H. Accordingly, petitioner, through K&H, is entitled to the
$60,143 deduction for his 1991 taxable year.
The final item addressed by the parties’ briefs concerns
respondent’s disallowance of interest paid by K&H on indebtedness
incurred to purchase a yacht. The amounts disallowed for
petitioner’s 1990 through 1993 taxable years are $20,659,
$20,280, $17,515, and $11,950, respectively.
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