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v. United States, 149 F.3d 805, 816 (8th Cir. 1998); Kappel v.
United States, 437 F.2d 1222, 1226 (3d Cir. 1971); Estate of
Smith v. Commissioner, 110 T.C. 12 (1998).
Although the bylaws of Dreyer Farms require Mr. Weeldreyer
to repay amounts for which the corporation is disallowed a
deduction, Mr. Weeldreyer does not claim that he has repaid the
disallowed amounts. Indeed, there is no evidence in the record
to show that he did. Therefore, section 1341 does not apply. We
hold that Dreyer Farms’ payment of the Weeldreyers’ food, repair
and maintenance, remodeling, landscaping, utilities, and
telephone expenses constitutes income to the Weeldreyers.
Petitioners argue that the expenses are meals and lodging
expenses excludable under section 119. We have found to the
contrary.
Further, although the repair and maintenance, remodeling,
and landscaping expenses were incurred by the Weeldreyers as
tenants under the farm lease, those expenses relate to the use of
the farmhouse, not to the raising of the crops. Thus, those
expenses, as well as the food, utilities, and telephone expenses,
are the Weeldreyers’ personal living expenses.
Personal, family, or living expenses are not deductible
except as otherwise expressly permitted. Sec. 262. A taxpayer’s
expenses for his or her own meals and lodging are personal
because they would have been incurred whether or not the taxpayer
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