- 7 -
Section 162(a) allows a deduction for all ordinary and
necessary business expenses paid or incurred during the taxable
year. The costs of acquiring licenses with useful lives
exceeding 1 year are capital expenditures and are not deductible
as business expenses. Radio Station WBIR, Inc. v. Commissioner,
31 T.C. 803, 815 (1959). Section 263A requires the
capitalization of direct and indirect costs incurred in the
taxpayer’s production of personal property.
We conclude that the burden of proof relating to this issue
is on petitioner. Petitioner presented no evidence that the
attorney’s fees paid to obtain a lobster fishing license provided
a benefit limited to 1996. In addition, petitioner’s testimony
established that the utility and moving expenses were incurred as
part of the construction process and are subject to section 263A.
Accordingly, petitioner is not entitled to deduct the attorney’s
fees, moving costs, or utility costs in 1996.
Contentions we have not addressed are moot, irrelevant, or
meritless.
To reflect the foregoing,
Decision will be entered
under Rule 155.
Page: Previous 1 2 3 4 5 6 7
Last modified: May 25, 2011