- 4 - case does not shift to respondent. Employee Business Expenses Section 162 generally allows a deduction for ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business. Generally, no deduction is allowed for personal, living, or family expenses. See sec. 262. An employee's trade or business is earning his compensation, and generally only the expenses that are related to the continuation of his employment are deductible. Noland v. Commissioner, 269 F.2d 108, 111 (4th Cir. 1959), affg. T.C. Memo. 1958-60. Petitioner must show that the business expenses he claimed were incurred primarily for business rather than for personal reasons. See Rule 142(a). To show that an expense was not personal, petitioner must prove that the expense was incurred primarily to benefit his business, the continuation of his employment, and that there was a proximate relationship between the claimed expense and his business. Walliser v. Commissioner, 72 T.C. 433, 437 (1979). Where a taxpayer has established that he incurred a trade or business expense, failure to prove the exact amount of the otherwise deductible item may not always be fatal. Generally, unless prevented by section 274, the Court may estimate the amount of such an expense and allow the deduction to that extent. See Finley v. Commissioner, 255 F.2d 128, 133 (10th Cir. 1958),Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011