Nicholas M. Romer - Page 8




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         sources, petitioner seeks to deduct the following additional                 
         expenses relating to his aviation activities, not previously                 
         claimed on his return and not agreed to by respondent (the                   
         unagreed expenses):                                                          
                             Year             Amount                                  
                             1989           $40,074                                   
                             1990           53,372                                    
                             1991            1 47,504                                 
                   1 This amount includes additional depreciation of                  
              $20,847 that petitioner is claiming on one of his                       
              aircraft.  The $47,504 amount is also based, in part,                   
              on petitioner’s alleged duplicate living expenses                       
              assuming that Nashville, Tenn., is petitioner’s tax                     
              home.  If Minneapolis, Minn., is assumed to be                          
              petitioner’s tax home, the amount claimed is $43,476.                   
              Section 162 generally allows a deduction for all ordinary               
         and necessary expenses paid or incurred during the taxable year              
         in carrying on a trade or business.  An expense is ordinary if it            
         is customary or usual within a particular trade, business, or                
         industry or relates to a transaction “of common or frequent                  
         occurrence in the type of business involved.”  Deputy v. du Pont,            
         308 U.S. 488, 495 (1940).  An expense is necessary if it is                  
         appropriate and helpful for the development of the business.                 
         Commissioner v. Heininger, 320 U.S. 467, 471 (1943).  Expenses               
         that are personal in nature are generally not allowed as                     
         deductions.  Sec. 262(a).                                                    
              When a taxpayer establishes that he has incurred deductible             
         expenses but is unable to substantiate the exact amounts, we can             
         estimate the deductible amount, but only if the taxpayer presents            






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