- 8 -
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
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011