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not identify these as other than meal or entertainment expenses,
or otherwise argue that the expenses should be allowed in full.
We find petitioner’s summary to be support for respondent’s
determination that the business promotion expenses are subject to
the 50-percent limitation under section 274(n). Based on this
record, we sustain that determination.2
The second issue for decision is whether petitioner is
entitled to deduct amounts representing the repayment of loan
principal.
Petitioner testified that he lent his business $31,712 in
1990 and $55,293 in 1992, and that his business partially repaid
these loans in the years in issue in the amount of $30,000 in
each year. Petitioner claimed a Schedule C deduction of $30,000
for each payment; respondent disallowed the deductions in full.
Petitioner is not entitled to the deductions for the alleged
loan payments for two primary reasons. First, and most
fundamentally, there was no loan for Federal income tax purposes.
Petitioner’s business was a sole proprietorship--not an entity
separate from petitioner--and as such petitioner and his business
share an identity for tax purposes. Fairchild v. Commissioner,
T.C. Memo. 2001-237. Thus, any loan effectively would have been
2 There is no credible evidence in the record to rebut
the presumption of correctness which would attach to respondent’s
determination. Therefore, the provisions of sec. 7491(a),
placing the burden of proof on respondent, do not apply.
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