Walter L. Medlin - Page 27

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          “ordinary” expense under section 162, the expense must arise from           
          a transaction that is “of common or frequent occurrence in the              
          type of business involved.”  Deputy v. du Pont, 308 U.S. 488, 495           
          (1940); Tarakci v. Commissioner, supra.                                     
               There is no dispute in this case that petitioner was engaged           
          in orange grove, cattle, and Ferrari activities.  There is also             
          no dispute, we think, that those activities are such that                   
          expenses arise in their normal course.72  As petitioner states              
          with respect to his cattle, “he’s got to eat”.  However, to                 
          substantiate his expenses for those activities, petitioner has              
          simply provided a bundle of receipts and a listing of expenses.             
          Most of those receipts and the listing do not show for what                 
          purpose the expenses were made.  Those items do not foreclose               
          that the expenses incurred were personal expenses unrelated to              
          the activities that petitioner claims deductions for or that the            


               71(...continued)                                                       
          requirements with respect to “any traveling expense (including              
          meals and lodging while away from home)”, “for any item with                
          respect to an activity which is of a type generally considered to           
          constitute entertainment, amusement, or recreation, or with                 
          respect to a facility used in connection with such an activity”,            
          and for any expenses relating to passenger automobiles or any               
          other property used as a means of transportation.  See secs.                
          274(d)(4), 280F(d)(4).  We note that several of the expenses that           
          petitioner claims as a deduction, he categorizes as “Automobiles”           
          and “Meals & Entertainment”.  Also, he claims expenses relating             
          to his collection of Ferraris.                                              
               72At trial, petitioner testified with respect to his cattle            
          activity that he incurred expenses for 50-pound mineral blocks,             
          hay, and health supplies such as injections, insect sprays, “and            
          stuff”.  Petitioner’s testimony regarding those expenses was                
          general and not specific.                                                   




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