Walter Michael Alley - Page 8

                                        - 7 -                                         
          1990), affg. 91 T.C. 686 (1988).  Petitioner has the burden of              
          proving that he was engaged in a trade or business.  Rule 142(a);           
          INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992); New                  
          Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934); Welch v.           
          Helvering, 290 U.S. 111 (1933).                                             
               This Court in Kurkjian v. Commissioner, 65 T.C. 862, 868               
          (1976) (quoting Hirsch v. Commissioner, 315 F.2d 731, 736 (9th              
          Cir. 1963), affg. T.C. Memo. 1961-256), stated:                             
                    From the very import of Section 23 [referring to sec.             
               23(a)(1)(A), the 1939 Code predecessor of sec. 162(a)],                
               which presupposes that the taxpayer has received taxable               
               income before deductions can be taken therefrom, it is clear           
               that Congress intended that the profit or income motive must           
               first be present in and dominate any taxpayer’s “trade or              
               business” before deductions may be taken.  While the                   
               expectation of the taxpayer need not be reasonable, and                
               immediate profit from the business is not necessary,                   
               nevertheless, the basic and dominant intent behind the                 
               taxpayer’s activities, out of which the claimed expenses or            
               debts were incurred, must be ultimately to make a profit or            
               income from those very same activities.  * * * Absent that             
               basic and dominant motive, the taxpayer’s activities, no               
               matter how intensive, extensive or expensive, have not been            
               construed by the Courts as carrying on a trade or business             
               within the purview of Section 23.  * * *                               
          We therefore must determine whether petitioner entered into a               
          lease with his employer and, if so, whether petitioner entered              
          into said lease with the intent to make a profit.                           
               During taxable years 2000 and 2001, petitioner did not lease           
          any other vehicles.  Petitioner testified:  (1) He did not try to           
          lease his truck to any other individual; and (2) there was no               
          formal written lease between himself and his employer.                      






Page:  Previous  1  2  3  4  5  6  7  8  9  10  Next

Last modified: May 25, 2011