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P.R. Farms, Inc. v. Commissioner, 820 F.2d 1084, 1089 (9th Cir.
1987), affg. T.C. Memo. 1984-549; Gill v. Commissioner, T.C. Memo.
1994-92, affd. 76 F.3d 378 (6th Cir. 1996). Thus, our analysis
begins by focusing upon whether WVI’s expenditures were ordinary
and necessary in the context of the time-share resort industry. An
expense is ordinary if it is common or frequent in the context of
the particular business out of which it arose. See Deputy v.
DuPont, 308 U.S. 488, 495 (1940). An expense is necessary if it is
appropriate and helpful to the operation of the taxpayer’s trade or
business. See Carbine v. Commissioner, 83 T.C. 356, 363 (1984),
affd. 777 F.2d 662 (11th Cir. 1985).
A. Expenditures for the Hawaii and Key West Trips
Petitioners’ evidence substantiating their activities of their
Key West and Hawaii trips consisted of their testimony and prepared
itineraries. We view petitioners’ testimony with caution, as it
was self-serving. In addition, the itineraries were prepared by
petitioners at least a year after the trips and in response to a
tax audit; understandably, we question their reliability.
Moreover, we are unable to ascertain from the itineraries the
business relevance of many of petitioners’ activities.
Accordingly, petitioners failed to persuade us that the purpose of
these trips was not primarily their personal benefit. See Grossman
v. Commissioner, T.C. Memo. 1996-452, supplemented by T.C. Memo.
1997-451, affd. 182 F.3d 275 (4th Cir. 1999); Fong v. Commissioner,
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