Richard G. and Carolyn J. Newhouse - Page 12




                                       - 11 -                                         
          business.  The expenses must be directly or proximately related             
          to the taxpayer's trade or business.  Deputy v. du Pont, 308 U.S.           
          488, 494-495 (1940); sec. 1.162-1, Income Tax Regs.  An expense             
          is considered "ordinary" if commonly or frequently incurred in              
          the trade or business of the taxpayer.  Deputy v. du Pont, supra            
          at 495-496.  An expense is "necessary" if it is one that is                 
          appropriate or helpful in carrying on petitioner's trade or                 
          business.  Commissioner v. Heininger, 320 U.S. 467, 475 (1943).             
          The expense must also be reasonable in amount relative to its               
          purpose.  Cardwell v. Commissioner, T.C. Memo. 1982-453 (citing             
          United States v. Haskal Engg. & Supply Co., 380 F.2d 786, 788               
          (9th Cir. 1967)).                                                           
               An employee's trade or business is earning his compensation,           
          and generally only those expenses that are related to the                   
          continuation of his employment are deductible.  Noland v.                   
          Commissioner, 269 F.2d 108, 111 (4th Cir. 1959), affg. T.C. Memo.           
          1958-60.                                                                    
               Petitioner has not established through his testimony or by             
          other evidence that the rental expenses incurred to store his own           
          "library" were of a type commonly or frequently incurred in                 
          petitioner's trade or business of earning pay as a part-time                
          temporary junior college professor.  Although it is to be                   
          expected that petitioner would keep a certain amount of books,              
          maps, and other items on hand as aids to teaching geography, it             






Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  Next

Last modified: May 25, 2011