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improbable that petitioners, as per the testimony, bought the
Jeep solely for business use and subsequently completely
segregated their personal and business lives such that they never
overlapped in driving it. In the absence of any
contemporaneously maintained records to show petitioners’ actual
business and personal use of the Jeep, we hold that they are not
entitled to deduct any of the automobile-related expenses. See
sec. 274(d).
Boat-related expenses
During the year in issue, petitioners owned a 34-foot yacht
which they had purchased in approximately 1984, as well as a 26-
foot sail boat. Mr. Brayshaw used the yacht to take measurements
on the San Francisco Bay for use in the development of the
computer software. Petitioners argue that numerous expenses
incurred in connection with this yacht are deductible.
Respondent, in his trial memorandum, argues that “the
development of the * * * boating software is a separate
enterprise from petitioner’s [primary] occupation and as such the
related expenses are currently non-deductible.”
Ordinary and necessary business expenses generally are
deductible in the taxable year in which they are paid. Sec.
162(a). Expenses incurred prior to the commencement of a
business activity, however, are start-up expenditures which
generally must be amortized and are not currently deductible.
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