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rentals or other payments required to be made as a
condition to the continued use or possession, for
purposes of the trade or business, of property to which
the taxpayer has not taken or is not taking title or in
which he has no equity.
Structurally, section 162 is included in part VI (Itemized
Deductions For Individuals And Corporations) of subchapter B
(Computation of Taxable Income) of chapter 1 (Normal Taxes And
Surtaxes) of subtitle A (Income Taxes) of title 26 (Internal
Revenue Code) of the United States Code. The relevance of the
placement of section 162 within the Internal Revenue Code will
become apparent momentarily.
Also included within part VI is section 161. That section
provides as follows:
In computing taxable income under section 63,
there shall be allowed as deductions the items
specified in this part [i.e., part VI], subject to the
exceptions provided in part IX (sec. 261 and following,
relating to items not deductible). [Emphasis added.]
Section 261, which is entitled “General Rule For
Disallowance Of Deductions”, provides that “In computing taxable
income no deduction shall in any case be allowed in respect of
the items specified in this part [i.e., part IX].” One of the
sections included in part IX is section 280A.
At this point it should be apparent that section 162 is
subject to the exceptions and constraints of section 280A. See
New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934) (oft
cited for the proposition that deductions are a matter of
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