- 32 -
With respect to petitioner’s $31,860 casualty loss that he
claimed for 1991, he testified that this was Mrs. Corrigan’s loss
and that there was an insurance recovery. Accordingly,
petitioner is not entitled to any part of the $31,860 casualty
loss that he claimed for 1991.
C. Employee Expenses
Petitioner claimed deductions for each year at issue in
connection with his employment. The deductions concerned travel,
meals, and other employee-type expenses.
A taxpayer may deduct ordinary and necessary business
expenses incurred in conducting a trade or business. Sec.
162(a). The term “trade or business” includes the trade or
business of being an employee. Primuth v. Commissioner, 54 T.C.
374, 377 (1970). Section 274, however, limits deductions for
entertainment and recreation that would otherwise be allowable
unless it is established that the expenditures were directly
related to or preceding a bona fide business discussion and were
associated with the active conduct of a taxpayer’s trade or
business. See sec. 274(a)(1)(A). A deduction is allowed for
meals only if such expenses are not lavish and the taxpayer is
present when such meals are furnished. Sec. 274(k)(1). In
addition, section 274(d) limits such deductions to those that can
be substantiated by adequate records or other evidence
corroborating the amount of the expenditure, the time and place
Page: Previous 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 NextLast modified: May 25, 2011