Paul Harrison Duncan - Page 4




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          Allowed by  Disallowed by                                                   
          Per Return    Respondent  Respondent                                        
          Car and truck expenses       $17,877       $20,431       $(2,554)           
          Sec. 179 expense              10,000           -0-        10,000            
          Insurance                      1,385         1,385           -0-            
          Interest                          14            14           -0-            
          Office expense                   230           230           -0-            
          Repairs & maint.              20,255        20,255           -0-            
          Taxes & licenses                 275           275           -0-            
          Lodging                        5,730           154         5,576            
          Meals (50%)*                   2,255         1,984           271            
          Other expenses                 3,749         3,749           -0-            
          Business use of home             343           -0-           343            
          Total expenses             $62,113       $48,477       $13,636              
                                                                                     
               *The meal amounts reflect the application of the 50%                   
               limitation under sec. 274(n).                                          

          Respondent also determined petitioner was liable for the addition           
          to tax under section 6651(a)(1) for failure to file his return              
          timely.                                                                     
               Section 162(a) allows a deduction for the ordinary and                 
          necessary expenses paid or incurred during the taxable year in              
          carrying on a trade or business.  Section 162(a)(2) expressly               
          permits the deduction of traveling expenses, including meals and            
          lodging, while away from home in the pursuit of a trade or                  
          business.  Expenses that do not meet these criteria are                     
          considered personal expenses and are not deductible.  See sec.              
          262(a).                                                                     
               A taxpayer is required to maintain records sufficient to               
          establish the amount of his or her income and deductions.  See              
          sec. 6001; sec. 1.6001-1(a), Income Tax Regs.  Under certain                






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Last modified: May 25, 2011