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Income Tax Regs. We conclude that petitioners have not met the
requirements of section 274(d). See Nicholls, North, Buse Co. v.
Commissioner, 56 T.C. 1225, 1235-1236 (1971); Kennelly v.
Commissioner, 56 T.C. 936, 942 (1971), affd. 456 F.2d 1335 (2d
Cir. 1972); Marlin v. Commissioner, 54 T.C. 560, 568 (1970);
Thorpe v. Commissioner, T.C. Memo. 1998-115; Tesar v.
Commissioner, T.C. Memo. 1997-207; Group Admin. Premium Servs.,
Inc. v. Commissioner, T.C. Memo. 1996-451. Thus, Cost Less may
not deduct business use of the van in the years in issue.
D. Deduction for Miscellaneous Expenses
Ordinarily, a shareholder may not deduct a payment made on
behalf of the corporation but must treat it as a loan or a
capital contribution. See Deputy v. DuPont, 308 U.S. 488 (1940);
Betson v. Commissioner, 802 F.2d 365, 368 (9th Cir. 1986), affg.
in part, revg. in part T.C. Memo. 1984-264; Rink v. Commissioner,
51 T.C. 746, 751 (1969); see also sec. 1.263(a)-2(f), Income Tax
Regs. Petitioners contend that petitioner occasionally paid
for miscellaneous items such as photocopies and breakfast and
lunch for Cost Less' employees and customers, and that Cost Less
did not reimburse petitioner for those expenses. Petitioners
contend that Cost Less may deduct $50 per week for those
expenses. However, petitioners have no records to substantiate
their claim that petitioner paid these amounts.
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