- 8 - with him at his office, and sometimes he would travel elsewhere for meetings. Expenses incurred for incidental or occasional trade or business use are not deductible even if the home office was used exclusively for such purpose. See, e.g., Cally v. Commissioner, T.C. Memo. 1983-203; Roth v. Commissioner, T.C. Memo. 1981-699. Petitioners have not established that the exception to section 280A(a) applies, and respondent’s disallowance of the deduction for utility expenses claimed for the home office is sustained.5 Petitioners also included under insurance expenses a portion of their homeowner’s insurance expense allocated to Mr. Brown’s home office and life insurance for Mr. Brown. If insurance expenses are directly related to business overhead, then they constitute deductible business expenses under section 162. Blaess v. Commissioner, 28 T.C. 710, 714-715 (1957); see also Green v. Commissioner, T.C. Memo. 1989-599. The life insurance for Mr. Brown is not directly related to his law practice, and the amount representing the homeowner’s insurance expense was not substantiated; therefore, respondent’s disallowance of the claimed deduction for insurance expenses is sustained. 5 If the remaining amount of the utility expenses were properly substantiated and thus allowable, the deduction for those expenses would have been limited by sec. 280A(c)(5) not to exceed the excess of the gross income “derived from such use” of the home office in the trade or business, reduced by other expenses of the trade or business.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011