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Miscellaneous expenses
Petitioners argued at trial that numerous miscellaneous
expenses are deductible. These expenses include rentals of post
office boxes, postage, shipping expense, copying expense, a New
York Times newspaper subscription, business cards, office
supplies, hardware, telephone lines, and telephone calls. Some
of these items, in particular the newspaper subscription and
certain of the telephone lines, are personal expenses and are
nondeductible under section 262(a). With respect to the
remaining items, either no business purpose is evident, the
expenses were paid with corporate funds, or they were hybrid
corporate/non-corporate/personal expenses which we could not
disentangle. We therefore hold that petitioners are not entitled
to a deduction for any of these expenses.
Home office expenses
Petitioners argue that various expenses related to their
residence are deductible due to business use of a portion
thereof. These expenses include depreciation, gas, electricity,
water, sewer, refuse, repairs, property tax, condominium fees,
and mortgage interest.
Deductions for expenses attributable to a taxpayer’s
business use of his home are disallowed unless they fit within
the exceptions enumerated in section 280A. Sec. 280A(a). The
exception applicable to the case at hand is the following: A
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