- 11 -
179 expense deduction) far exceeded his trade or business income.
Therefore, petitioner is not entitled to any section 179 expense
deduction for 1997. Sec. 179(b)(3)(A). Additionally, petitioner
failed to produce any evidence to substantiate his entitlement to
a depreciation deduction greater than that allowed by respondent
in the notice of deficiency and conceded by respondent prior to
trial. Accordingly, the Court holds that petitioner is not
entitled to a depreciation/section 179 expense deduction in
connection with Partners in excess of the amount allowed by
respondent.
The third issue is whether petitioner is entitled to a
$1,950 deduction for travel, meals, and entertainment expenses in
connection with Partners. On Schedule C, petitioner claimed
travel expenses of $1,800 and meals and entertainment expenses of
$300. Because section 274(n)(1) limits a deduction for meals and
entertainment to 50 percent of expenses incurred, petitioner
claimed deductions of $1,800 for travel and $150 for meals and
entertainment, totaling $1,950. Petitioner contends that these
expenses were incurred in connection with two trips to China
during 1997. Respondent disallowed this deduction in full.
As stated previously, expenses for travel, meals, and
entertainment are subject to the strict substantiation
requirements of section 274(d). Moreover, section 1.162-2(b)(1),
Income Tax Regs., provides that, if travel expenses are incurred
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011