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measured objectively. As the Treasury Department’s regulations
under section 274 state as to the matter of entertainment:
An objective test shall be used to determine whether an
activity is of a type generally considered to
constitute entertainment. Thus, if an activity is
generally considered to be entertainment, it will
constitute entertainment for purposes of this section
and section 274(a) regardless of whether the
expenditure can also be described otherwise, and even
though the expenditure relates to the taxpayer alone.
This objective test precludes arguments such as that
“entertainment” means only entertainment of others or
that an expenditure for entertainment should be
characterized as an expenditure for advertising or
public relations. * * * [Sec. 1.274-2(b)(1)(ii),
Income Tax Regs.]
We see no reason why this same sort of objective test should not
also apply to the other two matters of amusement and recreation.
Here, the Centurion was used by Roach, in the name of
petitioner, in connection with an activity, sailing, which is of
a type that we would consider to constitute entertainment,
amusement, and/or recreation. In addition to the fact that
petitioner’s board acknowledged in its minutes that sailing was a
form of corporate entertainment and that Roach admitted in the
property tax statements that sailing the Centurion was a form of
“recreation” and “pleasure”, the builders of the Centurion
designed it specifically with an eye towards high class
entertainment, amusement, and recreation. Roach also actually
used the Centurion for entertainment, amusement, and/or
recreation. Roach raced the Centurion, slept upon it, wined and
dined upon it, and hosted upon it personal invitees who sometimes
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