- 5 - Initially, petitioner commuted between Memphis and Knoxville either by automobile or by commercial airline. Both methods proved to be time consuming and costly. Petitioner made a cost/benefit analysis from which he concluded it would be more economical to purchase an airplane to make the weekly commute between Knoxville and Memphis. Accordingly, petitioner, in early October 1996, purchased a Cessna model 192 airplane and, after paying for flying lessons, thereafter used the plane to commute between Memphis and Knoxville. Petitioner's contract with Josten's was completed in November 1996, and he had no further contractual or employment relationship with Josten's. Petitioner then gave up the Memphis apartment and continued living with his girlfriend at Knoxville. He did not find employment at Knoxville. In March 1997, the relationship between petitioner and his girlfriend terminated. Petitioner moved back to Austin, Texas, and found employment there. On his Federal income tax return for 1996, petitioner reported the income and expenses of the contract activity with Josten's as a trade or business activity, which respondent does not dispute. Petitioner reported gross income of $216,616, expenses of $198,677, and a net profit of $17,939. In the notice of deficiency, respondent disallowed deductions claimed for expenses in the amount of $40,023. The disallowed deductionsPage: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011