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It is well settled that “Ordinarily, taxpayers are bound by
the form of the transaction they have chosen; taxpayers may not
in hindsight recast the transaction as one that they might have
made in order to obtain tax advantages.” Framatome Connectors
USA Inc. v. Commissioner, 118 T.C. 32, 70 (2002) (citing Estate
of Leavitt v. Commissioner, 875 F.2d 420, 423 (4th Cir. 1989),
affg. 90 T.C. 206 (1988), and Grojean v. Commissioner, 248 F.3d
572, 576 (7th Cir. 2001), affg. T.C. Memo. 1999-425). Here,
inasmuch as Mr. Weeldreyer farmed the Weeldreyer farm as a
tenant, and not as an employee of Dreyer Farms, the food and
lodging in question were not furnished to Mr. Weeldreyer as a
corporate 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
Weeldreyer Farm
During the years at issue, Dreyer Farms’ business activities
included leasing the Weeldreyer farm. It leased the farm,
including the farmhouse, to the Weeldreyers and received rent in
the form of 40 percent of the crops grown on the farm.
Therefore, we look to the terms of the farm leases to determine
whether expenses for maintenance and repair, remodeling,
landscaping, insurance, telephone, utilities, depreciation, and
taxes are the expenses of Dreyer Farms or the Weeldreyers.
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