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Respondent contends that the miscellaneous expenses
attributable to the Dobbe residence were nondeductible personal
expenses of Mr. and Mrs. Dobbe and that Holland America conferred
an economic benefit on Mr. and Mrs. Dobbe by paying those
expenses. Petitioners argue the miscellaneous deductions were
ordinary and necessary business expenses because Holland America
leased the entire farm, including the residence, for business
purposes. We agree with respondent that Holland America is not
entitled to deduct the expenses attributable to Mr. and Mrs.
Dobbe’s residence.
The expenses of maintaining a household, including
utilities, insurance premiums, and property tax, are personal
living expenses and are not deductible. See sec. 262(a); sec.
1.262-1(b)(2) and (3), Income Tax Regs. As we held earlier in
this opinion, the residence was not leased to Holland America
and, with the exception of the office, was not used for business
purposes. Because the miscellaneous expenses were personal and
were unrelated to the business of Holland America, we sustain
respondent’s determination that the above amounts are not
deductible as ordinary and necessary business expenses.
F. Golf Clubs (“Customer Relations” Expense)
Holland America claimed a deduction of $1,455, which it
spent to purchase a set of golf clubs for Rinus Heemskerk, a
flower bulb salesman/broker in The Netherlands. Holland America
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