- 26 -
1964), affg. 41 T.C. 593 (1964); Tokarski v. Commissioner, 87
T.C. at 77; Williams v. Commissioner, supra. We find, therefore,
that petitioners have failed to prove that the new solarium was
constructed and used primarily for business reasons, and we
sustain respondent’s determination disallowing the deduction.9
E. Miscellaneous Expenses
Respondent disallowed miscellaneous deductions for expenses
paid by Holland America attributable to the Dobbe residence.
During FYE 1993, Holland America claimed a deduction for the
entire amount of property tax, hazard insurance premiums, and the
electricity bill associated with the property at 1066 South Pekin
Road. After an examination, respondent determined the following
amounts to be attributable to the Dobbe residence: Property tax
($2,054), hazard insurance premiums ($350), and electricity
($2,000).10
9Petitioners asserted, in the alternative, that the true
purpose of the new solarium was to enable Holland America to
conduct growing experiments; consequently, the expenditure
qualified as a research and experimental expenditure under sec.
174(a). See sec. 263(a)(1)(B); sec. 1.174-2, Income Tax Regs.
Except for a brief, one-sentence mention of sec. 174(a), however,
Holland America has not presented any meaningful argument based
on sec. 174(a), nor has it proved that it meets the requirements
of sec. 174(a).
10Respondent’s witness, Susan Signor, a revenue agent,
testified to the above amounts. At trial, petitioners’ attorney
objected to the introduction of this evidence on the grounds of
best evidence, competence, and relevance; however, petitioners
did not dispute the accuracy of the amounts either at trial or on
brief.
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