- 24 -
that a connection exists between that programming and
petitioner’s playwriting. An additional $107.48 appears to be
for software related to business management. These deductions
are allowed. It is unclear what the rest are for; we disallow a
deduction for them.
11. “Performances, Viewing”
Petitioner has submitted evidence of approximately one
hundred expenditures in this category, constituting his theater,
video rental, and other sundry expenses for the year. Several
reasons exist as to why we must disallow these deductions. One
is petitioner’s having undermined his own credibility in this
area. At trial, in response to a direct question, petitioner
testified that every time he listens to a CD or watches a movie
he is engaged in playwriting and not recreation. This suggests a
less than candid assessment of his business expenses.
Even assuming that petitioner were believable on this point,
these deductions would still be precluded under section 1.274-
2(c)(3)(i), Income Tax Regs., which provides that the taxpayer
must have more than a “general expectation” of deriving income
for an entertainment expense to be deductible. Had petitioner
testified as to a particular difficulty with the plot or
characters or language of his play that he sought to fix by
watching a specifically selected play by someone else, that
specific expectation would perhaps justify a deduction. Merely
broadening one’s horizons is not enough. The credibility and
Page: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 NextLast modified: May 25, 2011