- 19 - employee for the convenience of his employer. Thus, the food and lodging expenses at issue are not section 119(a) meals and lodging expenses. 2. Deductibility of Expenses Related to the Leasing of the Homestead During the years at issue, Wolf Creek Farm business activities included leasing the homestead. It leased the homestead, including the farmhouse, to Mr. Tschetter and received rent in the form of a percentage of the crops grown on the farm. Therefore, we look to the terms of the farm lease to determine whether expenses for utilities, depreciation, and taxes are the expenses of Wolf Creek Farm or Mr. Tschetter. a. Property Insurance Wolf Creek Farm deducted $667 in 1995 and $631 in 1996 for property insurance. “Certain business-related insurance expenses unquestionably are deductible under section 162(a).” Metrocorp, Inc. v. Commissioner, 116 T.C. 211, 245 (2001) (citing section 1.162-1(a), Income Tax Regs.). The farm lease does not require Mr. Tschetter to provide property insurance covering the farmhouse or other improvements on the property. The property insurance is an ordinary and necessary business expense of Wolf Creek Farm (the owner of the property) and not a personal, family, or living expense of Mr. Tschetter. We hold, therefore, Wolf Creek Farm is entitled to deduct the insurance expenses as claimed in each of the years at issue.Page: Previous 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Next
Last modified: May 25, 2011