Robert W. Tschetter - Page 19

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          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.                                      





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