Bernardus A. P. Dobbe and Klazina W. Dobbe - Page 16




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          legislative grace; Holland America bears the burden of                      
          substantiating claimed deductions.  See Rule 142(a); INDOPCO,               
          Inc. v. Commissioner, 503 U.S. 79, 84 (1992); Welch v. Helvering,           
          290 U.S. 111 (1933).                                                        
               In order for Holland America to meet its burden of proof, it           
          must prove that the expenses deducted (1) were paid or incurred             
          during the taxable year, (2) were incurred to carry on its trade            
          or business, and (3) were ordinary and necessary expenditures of            
          the business.  See sec. 162(a); Commissioner v. Lincoln Sav. &              
          Loan Association, 403 U.S. 345, 352 (1971).  An expense is                  
          ordinary if it is customary or usual within a particular trade,             
          business, or industry or 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).  An expense is necessary if it           
          is appropriate and helpful for the development of the business.             
          See Commissioner v. Heininger, 320 U.S. 467, 471 (1943).                    
          Personal, living, or family expenses are not deductible.  See               
          sec. 262(a).                                                                
               We hold that none of the expenses in dispute, except the               
          cost of the golf clubs, was properly deducted under section                 
          162(a).  Our reasons are set forth below.                                   
               A.  In General                                                         
               Petitioners adamantly asserted an aggressive and                       
          nondiscerning position regarding the disputed expenses deducted             






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