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Generally, no deduction is allowed for personal, living, or
family expenses. See sec. 262. A taxpayer must show that any
claimed business expenses were incurred primarily for business
rather than personal reasons. See Rule 142(a). To show that an
expense was not personal, the taxpayer must show that the expense
was incurred primarily to benefit his business, and there must
have been a proximate relationship between the claimed expense
and the business. See Walliser v. Commissioner, 72 T.C. 433, 437
(1979).
1. Traveling Expenses
On Schedule C, petitioner claimed a deduction of $2,073.50
for traveling expenses. Petitioner made a total of 54 trips in
year 2000 for the purpose of “business development” in connection
with Field Investment Management. He produced a copy of the
pages from his day planner which set forth the name of the
“client”, the mileage traveled, the date, and the alleged
business purpose of each trip. On the 54 trips taken, petitioner
met with a total of four different persons. Petitioner’s day
planner shows that he met with a Ms. Hurd, a person whom he
identified as an employee of Comerica Bank, on 38 of the trips.
He testified that he met with her to give investment advice. He
did not provide any information regarding the other three
persons.
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Last modified: May 25, 2011