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Section 179
Petitioners filed a Schedule C on which they claimed a
section 179 deduction of $7,594. Petitioners agree that the
filing of the Schedule C was erroneous and that the claimed
deduction should have been claimed on Schedule A as an employee
business expense of Mr. Coffman’s. Moreover, the $7,594 is
conceded as an erroneous combination of two computer printouts,
one for $3,758 and one for $3,836, pertaining to the same assets.
Therefore, the issue is whether petitioners are entitled to a
section 179 deduction for $3,758, with regard to petitioners’
cost for a computer of $2,134, a printer/fax of $912, and a desk
and chair of $712. After a review of the record, we conclude
that petitioners have substantiated the purchase of the desk and
chair for use in Mr. Coffman’s home office and that they are
entitled to a miscellaneous itemized deduction for $712. See
sec. 67(a).
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, 290 U.S. 111, 113
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Last modified: May 25, 2011