Deborah Y. and Donald J. Everhart - Page 11

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          then the taxpayer has received income, even though it may still             
          be claimed that he is not entitled to retain the money, and even            
          though he may be liable to restore its equivalent.  See North Am.           
          Oil Consol. v. Burnet, 286 U.S. 417, 424 (1932).                            
               Assuming petitioner was correct in his conduit or agency               
          argument, he would still have to substantiate that the deposits             
          made to his account, checks cashed, and checks written on his               
          account, were not includable in his 2000 income.                            
               However, the record as a whole in the present case leads to            
          the inescapable conclusion that petitioner was a self-employed              
          contractor licensed by the city of Chicago during taxable year              
          2000, and that petitioner was the general contractor of record on           
          the Wells Fargo Home Mortgage, Inc. rehabilitation loan.                    
          Therefore, it is unnecessary to consider petitioner’s “conduit”             
          or “agency” argument.                                                       
               Section 162(a) allows a deduction for ordinary and necessary           
          business expenses paid or incurred during the taxable year in               
          carrying on any trade or business.  To be “ordinary” the                    
          transaction that gives rise to the expense must be of a common or           
          frequent occurrence in the type of business involved.  Deputy v.            
          du Pont, 308 U.S. 488, 495 (1940).  To be “necessary” an expense            
          must be “appropriate and helpful” to the taxpayer’s business.               
          Welch v. Helvering, supra at 113-114.                                       







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