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(2001) (citing section 1.162-1(a), Income Tax Regs.). The farm
leases do not require the Weeldreyers to provide property
insurance covering the farmhouse or other improvements on the
property. The property insurance is an ordinary and necessary
business expense of Dreyer Farms (the owner of the property) and
not a personal, family, or living expense of the Weeldreyers. We
hold, therefore, Dreyer Farms is entitled to deduct the insurance
expenses as claimed in each of the years at issue.
c. Utilities and Telephone
Dreyer Farms deducted utilities expenses of $1,694 in 1995,
$2,362 in 1996, and $2,235 in 1997 and telephone expenses of $338
in 1997. Utilities and telephone expenses may be deductible
under section 162(a) if the expenses incurred are ordinary and
necessary in carrying on a trade or business. Vanicek v.
Commissioner, 85 T.C. 731, 742 (1985); Sengpiehl v. Commissioner,
T.C. Memo. 1998-23; Green v. Commissioner, T.C. Memo. 1989-599.
Here, the farm leases did not contain any provisions
regarding the utilities or telephone for the farmhouse.
Petitioners did not produce any utility or telephone bills,
canceled checks, or testimony to identify that, if any, portion
of the utility and telephone expenses related to the
corporation’s business. We have no basis for making any
allocation of the expenses. Thus, petitioners have failed to
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