Barry S. and Yvonne C. Hillman - Page 26

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               Based on the foregoing, we conclude that petitioners have               
          failed to show error in respondent’s determination that their                
          show horse activities in 1993 and 1994 were “not engaged in for              
          profit” within the meaning of section 183(a).8                               
          II. Mileage Deductions                                                       
               The second issue is whether petitioners are entitled to                 
          automobile mileage deductions in excess of the amounts determined            
          by respondent.  In 1993 and 1994, Dr. Hillman deducted automobile            
          mileage expenses for his medical practice in the respective                  
          amounts of $6,823 and $8,128 based on 24,368 miles at 28 cents               
          per mile in 1993 and 28,027 miles at 29 cents per mile in 1994.              
          Respondent determined that Dr. Hillman’s allowable mileage                   
          expense deduction is limited to $3,636 (or 12,987 miles) and                 
          $4,308 (or 14,854 miles) for 1993 and 1994, respectively, on the             
          grounds that petitioners failed to show that any greater amounts             
          were for an ordinary and necessary business expense or were                  
          expended for the purpose designated.9                                        

               8 Accordingly, we do not reach respondent’s alternative                 
          contention that such activities constitute a “passive activity”              
          within the meaning of sec. 469.                                              
               9 Respondent makes no claim that these deductions are                   
          limited by virtue of sec. 274(d).  Because we conclude that                  
          petitioners have failed to prove error in respondent’s                       
          determination under sec. 162(a), we need not address the                     
          application of sec. 274(d) in this case.                                     

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