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manufactured home he purchased for Ms. Brownell and his two
children. Petitioner’s sole argument in his brief is that the
cost of the home represents compensation for past services
rendered by Ms. Brownell in connection with petitioner’s
business.
Personal, living, and family expenses generally are not
deductible. Sec. 262(a). Expenses which are ordinary and
necessary in carrying on a trade or business, on the other hand,
are generally deductible. Sec. 162(a). Compensation for
services may be deductible as an ordinary and necessary business
expense, but only if payment is made with the intent to
compensate. Paula Constr. Co. v. Commissioner, 58 T.C. 1055,
1058 (1972), affd. without published opinion 474 F.2d 1345 (5th
Cir. 1973). The existence of such an intent is a factual
question to be decided on the basis of the particular facts and
circumstances of the case. Id. at 1059.
Petitioner’s argument concerning his intent in purchasing
and transferring the manufactured home is not persuasive. In
reaching this conclusion, we find the permanent stipulation--
which was entered into just before the manufactured home was
purchased and given to Ms. Brownell--to be more reliable as
evidence of petitioner’s intent than petitioner’s testimony at
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