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per diem amount for each day he was in San Diego. Petitioner
determined the number of days he was in San Diego during each of
the years at issue and then multiplied that by a high-cost
locality per diem rate provided in various Internal Revenue
Service revenue procedures for the years at issue.3
For each of the years at issue, petitioner also deducted
expenses for traveling from San Diego to various air races and
air shows in locations such as Reno, Nevada. The travel expenses
claimed by petitioner for each of the years at issue in
connection with his air racing activity were in the following
amounts:
Expenses 1995 1996 1997
Per Diem in San Diego $35,112 $31,212 $13,832
Travel to air races 2,556 5,181 894
Total $37,668 $36,393 $14,726
As stated previously, respondent disallowed all of the claimed
air racing travel expenses for each of the years at issue.
Section 162(a) allows a deduction for the ordinary and
necessary expenses paid or incurred during the taxable year in
3 Rev. Proc. 94-77, 1994-2 C.B. 825, was in effect for
1995, Rev. Proc. 96-28, 1996-1 C.B. 686, was in effect for 1996
(as of April 1, 1996), and Rev. Proc. 96-64, 1996-2 C.B. 427, was
in effect for 1997. These publications provided high-cost
locality per diem rates of $152 for 1995 and 1996 and $166 for
1997. In calculating his San Diego expenses, petitioner, for
reasons unexplained, used a per diem rate of $152 for 1995 and
1997 but used a rate of $153 for 1996.
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