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MEMORANDUM OPINION
NIMS, Judge: Respondent determined Federal income tax
deficiencies for petitioners’ 1993 and 1994 taxable years in the
amounts of $20,446 and $37,214, respectively. The deficiencies
are attributable in part to adjustments in the taxable income
reported by R & J Transport, Inc. (R&J), an S corporation wholly
owned by petitioner Ronald Leschke. After concessions, this
Court is asked to decide whether, and to what extent, the
following expenditures made by R&J are deductible as business
expenses:
(1) Amounts used to purchase gift certificates given to
corporate customers of R&J;
(2) amounts paid for gift nut baskets given to employees of
R&J; and
(3) $100 bills given to employees of R&J as Christmas
bonuses.
Unless otherwise indicated, all section references are to
sections of the Internal Revenue Code in effect for the years in
issue, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
Background
This case was submitted fully stipulated pursuant to Rule
122, and the facts are so found. The stipulations of the
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