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occurrence in the type of business involved.” Deputy v. du Pont,
308 U.S. 488, 495 (1940). An expense is necessary if it is
appropriate and helpful for the development of the business. See
Commissioner v. Heininger, 320 U.S. 467, 471 (1943).
When payments for medical care are properly excludable from
an employee’s income because they are made under a “plan for
employees,” they are deductible by the employer as ordinary and
necessary business expenses under section 162(a). Sec.
1.162-10(a), Income Tax Regs. Consequently, Wolf Creek Farm is
entitled to deduct the insurance premiums and other medical
reimbursement payments under section 162(a).
C. Food, Utilities, Property Insurance, Property Taxes, and
Depreciation
1. Section 119: Employer-Provided Meals and Lodging
We next decide whether the food and lodging-related expenses
are employer-provided meals and lodging expenses, excludable from
Mr. Tschetter’s income under section 119 and deductible by Wolf
Creek Farm under section 162.
Meals and lodging furnished to an employee by his employer
are excluded from the employee’s gross income under section 119
if the meals and lodging are provided for the convenience of the
employer on the premises of the employer. In the case of
lodging, the employee must be required to accept the lodging on
the business premises of his employer as a condition of
employment.
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