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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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