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boundaries of the business premises is a factual question that
considers the employee’s duties as well as the nature of the
employer’s business. Lindeman v. Commissioner, 60 T.C. 609, 615
(1973).
During the years at issue, Waterfall Farms paid for the
Hubers’ food (which they consumed on the homestead) and deducted
the cost of the food on the corporation’s Forms 1120 filed for
fiscal years ending November 30, 1995, 1996, and 1997. In 1995
and 1996, the Hubers rented the homestead from Ms. Rose.
Waterfall Farms filed amended returns for 1995 and 1996
eliminating the deduction for the food because the homestead was
not its business property. In 1997, Waterfall Farms rented the
homestead from Ms. Rose. Although Waterfall Farms rented the
homestead, there is no evidence that any business activity (aside
from record keeping) took place on the homestead. Thus, the food
and lodging were not provided on the business premises of
Waterfall Farms.
Moreover, section 119 requires that meals and lodging be
furnished for the “convenience of the employer”. Meals and
lodging are furnished for the “convenience of the employer” if
there is a direct nexus between the meals and lodging furnished
and the asserted business interests of the employer served
thereby. McDonald v. Commissioner, supra at 230. Petitioners
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