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Discussion
Section 162(a) authorizes a deduction for all ordinary and
necessary expenses paid or incurred during a taxable year in
carrying on a trade or business. A “trade or business” includes
the trade or business of being an employee. O’Malley v.
Commissioner, 91 T.C. 352, 363-364 (1988); Primuth v.
Commissioner, 54 T.C. 374, 377-378 (1970). The costs of going
between one business location and another business location
generally are deductible under section 162(a). Rev. Rul. 55-109,
1955-1 C.B. 261.
The parties disagree as to whether petitioner’s
transportation expenses should be reported on Schedule A or
Schedule C. Respondent contends that petitioner, as an employee,
must claim the expenses at issue on his Schedule A as
miscellaneous itemized deductions and that they are limited to
the amount that exceeds the 2-percent floor imposed by section
67.
Section 62(a)(1) allows taxpayers to deduct from gross
income trade or business expenses “which are attributable to a
trade or business carried on by the taxpayer, if such trade or
business does not consist of the performance of services by the
taxpayer as an employee.” (Emphasis added.) Expenses excluded
under the section 62(a)(1) employee expense limitation are
treated as itemized deductions under section 63(d). Under
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Last modified: May 25, 2011