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We begin by noting that, as a general rule, respondent's
determinations of fact are presumptively correct, and petitioner
bears the burden of proving otherwise. See Rule 142(a); Welch v.
Helvering, 290 U.S. 111, 115 (1933).
Section 162(a) allows deductions for all the ordinary and
necessary expenses paid or incurred during the taxable year in
carrying on any trade or business. An "ordinary" expense is one
that relates to a transaction "of common or frequent occurrence
in the type of business involved", Deputy v. du Pont, 308 U.S.
488, 495 (1940), and a "necessary" expense is one that is
"appropriate and helpful" for "the development of the
petitioner's business", Welch v. Helvering, supra at 113.
Taxpayers do not have an inherent right to take tax
deductions. Deductions are a matter of legislative grace, and a
taxpayer bears the burden of proving entitlement to any deduction
claimed. See Deputy v. du Pont, supra at 493; New Colonial Ice
Co. v. Helvering, 292 U.S. 435, 440 (1934). The determination of
whether an expenditure satisfies the requirements for
deductibility under section 162 is a question of fact. See
Commissioner v. Heininger, 320 U.S. 467, 475 (1943); Granberg
Equip., Inc. v. Commissioner, 11 T.C. 704, 715 (1948).
Cascade promised in the 1982 agreement to pay Lea more for
the patents initially transferred in 1979. We must decide
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