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Discussion6
As previously stated, on his Schedule C for taxable years
2000 and 2001 petitioner deducted business expenses of $16,059
and $16,107, respectively. The parties agreed, at trial, that
petitioner substantiated truck expenses of $12,757 and $12,657
for the taxable years 2000 and 2001, respectively.
As we understand it, petitioner’s principal contention is
that he was individually and independently in the business of
leasing his truck to his employer, and that the agreed-upon
expenses incurred for maintenance and repairs of his truck were
deductible as ordinary and necessary expenses of conducting that
business and thus were above-the-line Schedule C deductions.
On the other hand, respondent contends that the agreed-upon
expenses are deductible as unreimbursed employee business
expenses and thus are itemized deductions subject to the 2-
percent floor of section 67.
It is well established that a taxpayer is engaged in a trade
or business if the taxpayer is involved in the activity (1) with
continuity and regularity, and (2) with the primary purpose of
making a profit. Commissioner v. Groetzinger, 480 U.S. 23, 35
(1987); Antonides v. Commissioner, 893 F.2d 656, 659 (4th Cir.
6We decide the issue in this case without regard to the
burden of proof. Accordingly, we need not decide whether the
general rule of sec. 7491(a)(1) is applicable in this case. See
Higbee v. Commissioner, 116 T.C. 438 (2001).
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Last modified: May 25, 2011