- 11 -
1999 2000
Car and truck $13,515 $12,651
Commissions and fees -0- 629
Office expenses -0- 3,505
Rent -0- 1,010
Supplies 14,900 15,198
Taxes/licenses -0- 360
Utilities -0- 808
Wages 13,300 14,215
Total adjustments $41,715 $48,376
Section 162 allows a deduction for ordinary and necessary
expenses that are paid or incurred during the taxable year in
carrying on a trade or business. Sec. 162(a); Deputy v. duPont,
308 U.S. 488, 495 (1940). Taxpayers carrying supplies on hand
can deduct the costs of those supplies in the amount that they
are actually consumed and used in operation during the taxable
year for which the return is made, if the cost of the supplies
was not deducted for any previous year. If the supplies are
incidental and are carried on hand with no record of consumption
kept, the taxpayer may deduct the total cost of such supplies
purchased during the taxable year for which the return is made.
Sec. 1.162-3, Income Tax Regs.
At trial, respondent conceded the following disallowed
expenses:
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Last modified: May 25, 2011