Norman E. Duquette, Inc. - Page 20




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          to Florida was tied in with the Duquettes’ separation, she to               
          Florida, he to Washington.  Based upon that proposed finding                
          respondent argues that the relocation and living expenses                   
          associated with that relocation were personal expenses of the               
          Duquettes, the reimbursement of which constituted a nondeductible           
          constructive dividend.                                                      
                    3.  Discussion                                                    
               We agree with respondent.  Petitioner is not clear on the              
          grounds for his deduction of the Florida expenses.  To the extent           
          that petitioner claims a deduction for the Florida expenses under           
          section 162(a)(3), as rentals, petitioner has failed to                     
          substantiate the business use of any rental property.  We deny              
          such a deduction for reasons similar to those we set forth with             
          respect to the Dallas apartment amount.  To the extent that                 
          petitioner otherwise claims a business purpose for the                      
          reimbursement of the Florida expenses, we find that such                    
          reimbursement was made principally to serve the personal needs of           
          the Duquettes, in connection with the breakup of their marriage,            
          and only incidentally for any purpose associated with petitioner.           
               Petitioner has failed to prove that the reimbursement of               
          the Florida expense was an ordinary and necessary expense paid or           
          incurred during the 1994 tax year in carrying on petitioner’s               
          trade or business.                                                          








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