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Petitioner produced a photocopy of a $325 money order,
purchased on June 3, 1992, by one of the other shareholders of
Special O, Marian Wilson, with the payee listed as Black Expo
USA. Petitioner failed to produce evidence sufficient to show,
within the strict substantiation parameters of section 274(d),
that any other expenses were incurred in connection with the New
Orleans trip that would be deductible by Special O.11 In
connection with the $325 payment to Black Expo USA, in order for
petitioner to be entitled to a deduction for her allocable share
of such expense (derivatively through the net profit or loss of
Special O), the expense must have been incurred by Special O.
The record shows that the $325 was paid by Marian Wilson, one of
the shareholders of Special O. The record does not show whether
Special O reimbursed Marian Wilson the $325. A corporation is
not entitled to deduct unreimbursed shareholder expenses. See
Lang Chevrolet Co. v. Commissioner, T.C. Memo. 1967-212. Special
O, therefore, could not have claimed a deduction for this item
unless Special O reimbursed the expense to the shareholder who
11
Petitioner produced a rental car contract from Audubon Rent-
A-Car in Baton Rouge, Louisiana, signed by one of the other
Special O shareholders, showing a $289.71 payment for rental of a
vehicle (the type of which is unidentifiable on the face of the
contract) from Nov. 27 through Nov. 30, 1992. Although the Court
is satisfied that this vehicle was rented during the relevant New
Orleans trip, the Court is not convinced that this expense is
primarily related to or properly allocable to Special O. Even if
viewed as a "travel to and from a destination" expense, it is not
deductible. Sec. 1.162-2(b)(1), Income Tax Regs.
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