- 13 -
In general, section 162(a)7 authorizes current deductions
for ordinary and necessary expenses of a trade or business.
However, sections 1618 and 2619 have the effect of subordinating
provisions such as section 162(a) to provisions such as section
263(a)(1),10 thereby disallowing the current deductions of
7 Sec. 162(a) provides, in pertinent part, as follows:
SEC. 162. TRADE OR BUSINESS EXPENSES.
(a) In General.--There shall be allowed as a deduction
all the ordinary and necessary expenses paid or incurred
during the taxable year in carrying on any trade or
business, including--
(1) a reasonable allowance for salaries or other
compensation for personal services actually rendered;
(2) traveling expenses * * * while away from home
in the pursuit of a trade or business; and
(3) rentals or other payments required to be made
as a condition to the continued use or possession, for
purposes of the trade or business, of property to which
the taxpayer has not taken or is not taking title or in
which he has no equity.
8 SEC. 161. ALLOWANCE OF DEDUCTIONS.
In computing taxable income under section 63, there
shall be allowed as deductions the items specified in this
part, subject to the exceptions provided in part IX (sec.
261 and following, relating to items not deductible).
9 SEC. 261. GENERAL RULE FOR DISALLOWANCE OF DEDUCTIONS.
In computing taxable income no deduction shall in any
case be allowed in respect of the items specified in this
part.
10 Sec. 263(a)(1) provides, in pertinent part, as follows:
(continued...)
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011