- 17 - There is no evidence that petitioner had to maintain an extensive library or extensive files for Norman to do his work, or that Norman required a dedicated area in which actually to write his reports. There is no substantiation of Norman’s claim: “The Dallas office was used about 10 days a month to deal with clients”. Petitioner has failed to convince us that any use of the apartment by Norman to further petitioner’s business was more than incidental to the Duquette’s use of the apartment as a home. Assuming such incidental use, petitioner has failed to show that there was even a market from which to determine what a reasonable rental would be for such incidental use. Petitioner has failed to prove that it was required to pay the Dallas apartment rental amount as a condition to the continued use or possession of a portion of the apartment. Consistent with the lack of evidence that petitioner’s use of the apartment was anything more than incidental to the Duquettes’ use of the apartment as their home is the conclusion that, if the Dallas apartment amount was paid to or for the benefit of the Duquettes, such payment was not made for business purposes but to distribute to them, as owners of the corporation, profits or funds unnecessary for business operations. Petitioner has failed to prove that such payment was an ordinary and necessary expense paid or incurred during the 1994 tax year in carrying on petitioner’s trade or business.Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
Last modified: May 25, 2011