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352-353. The Supreme Court has stated that a necessary expense
is an expense that is appropriate or helpful to the development
of the taxpayer’s business, see Commissioner v. Tellier, 383 U.S.
687, 689 (1966); Welch v. Helvering, 290 U.S. 111, 113-115
(1933), and that an ordinary expense is an expense that is
“normal, usual, or customary” in the type of business involved,
Deputy v. du Pont, 308 U.S. 488, 495-496 (1940); see also Welch
v. Helvering, supra at 113-115. The Supreme Court has observed
that the need for an expenditure to be ordinary serves, in part,
to “clarify the distinction, often difficult, between those
expenses that are currently deductible and those that are in the
nature of capital expenditures, which, if deductible at all, must
be amortized over the useful life of the asset.” Commissioner v.
Tellier, supra at 689-690.
The fact that a payment falls within a literal reading of
section 162(a) does not necessarily mean that the payment is
deductible. Sections 161 and 261, for example, except certain
payments from the current deductibility provision of section
162(a). See INDOPCO, Inc. v. Commissioner, 503 U.S. at 84.
Section 161 provides that “there shall be allowed as deductions
the items specified in * * * [section 162(a)], subject to the
exceptions provided in * * * sec. 261 and following, relating to
items not deductible”. Section 261 provides that “no deduction
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