Edwin A. Helwig - Page 18

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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             
               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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