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during 1994 was Memphis and, thus, expenses incurred in Los
Angeles are deductible. Conversely, respondent contends that
petitioner’s tax home during 1994 was Los Angeles and, as such,
petitioners are not entitled to deduct expenses incurred in Los
Angeles that year.
For 1994, petitioners reported $18,250.55 for petitioner’s
Los Angeles apartment rent and $12,384 as per diem expense for
meals away from home, which they subtracted from gross receipts
as cost of goods sold on Schedule C of their 1994 return.
Additionally, petitioners deducted the following expenses in
connection with petitioner’s Los Angeles activities: (1) $146.94
of their total car and truck expenses; (2) $1,840.15 of their
total rent or lease for car rental expenses; (3) $786.35 of their
total travel expenses, which represented dry cleaning in Los
Angeles and airline tickets between Memphis and Los Angeles; and
(4) $646.07 of their total meals and entertainment expenses
(prior to the 50-percent limitation). During 1994, petitioner
was in Los Angeles 287 days.5
4(...continued)
(petitioners failed to satisfy the strict substantiation
requirements of sec. 274(d) with respect to travel expenses
between Los Angeles and Memphis, particularly the business
purpose for such travel; see infra) and, for 1996, $4,600 for
meals (prior to the 50-percent limitation), $501.34 for car and
truck expenses, and $292.21 of travel expenses for car rental.
5It is notable that petitioner was also in Los Angeles 281
(continued...)
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