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Petitioner claimed meal and entertainment expenses of $1,720
in 1996 and $1,274 in 1997. Subtracting 50 percent of these
expenses pursuant to the section 274(n) limitation, he claimed
deductions of $860 and $637, respectively. Separately from these
deductions, petitioner also claimed deductions for “business
promotion” in the amounts of $2,544 and $2,120. In the statutory
notice of deficiency, respondent disallowed half of each of the
business promotion deductions.
Generally, expenses which are ordinary and necessary in
carrying on a trade or business are deductible. Sec. 162(a).
However, subject to exceptions not applicable here, a deduction
for any expense related to food, beverages, entertainment,
amusement, or recreation is limited to 50 percent of the amount
of the expense. Sec. 274(n). “Entertainment” includes
entertainment, amusement, or recreational activities at golf and
country clubs. Sec. 1.274-2(b)(1)(i), Income Tax Regs.
Respondent argues that the business promotion deductions are
subject to the 50-percent limitation because they are for meal
and entertainment expenses; namely, restaurant and golf-related
expenses. A summary prepared by petitioner’s representative
during the audit of petitioner’s return lists the amounts
constituting the total deduction claimed in 1996. The majority
of the expenses were in fact from restaurants and a country club.
The remaining expenses are of an unknown nature; petitioner did
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