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not establish that the Schedule C expenses were ordinary and
necessary business expenses of petitioner. At trial, the parties
treated these deductions as though they were claimed as employee
business expenses and so shall we.
In this posture of the case, we must decide whether the
expenses in question are deductible as ordinary and necessary
business expenses of petitioner’s employment. Our findings in
this record are based in part upon the testimony of petitioner.
Our evaluation of petitioner’s testimony is founded upon “the
ultimate task of a trier of the facts – the distillation of truth
from falsehood which is the daily grist of judicial life.” Diaz
v. Commissioner, 58 T.C. 560, 564 (1972). In this case, we found
petitioner to be an honest, sincere, and credible witness.
Section 162(a) allows a deduction for all the ordinary and
necessary expenses paid or incurred during the taxable year in
carrying on any trade or business. To be deductible as a
business expense, the expenditure must relate to activities which
constitute the current carrying on of an existing trade or
business. Corbett v. Commissioner, 55 T.C. 884, 887 (1971).
Whether activities carried on by an individual can be
characterized as a trade or business is a question of fact. Id.
at 887. This Court has long held that a taxpayer may be in the
trade or business of being an employee. Primuth v. Commissioner,
54 T.C. 374, 377 (1970).
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