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Furthermore, petitioner did not negotiate leasing terms with his
employer; instead, he was paid a flat rate of $25 per day for the
use of his personal vehicle in furtherance of Pacific’s business.
The flat rate of $25 per day could be received by any employee of
Pacific who used his or her personal vehicle in furtherance of
Pacific’s business.
Based upon on the record in this case, we conclude that
petitioner did not possess the required profit or income motive
when he used his personal vehicle in furtherance of Pacific’s
trade or business. In fact, we find that petitioner did not
enter into any lease with his employer. Further, we conclude
that petitioner’s use of his personal vehicle in furtherance of
Pacific’s trade or business was within the scope of his
activities as an employee of Pacific and that petitioner was not
individually and independently in the business of leasing his
truck to his employer.
It is clear that an individual may be in the trade or
business of being an employee and that ordinary and necessary
expenses incurred in that trade or business are deductible under
section 162. See sec. 1.162-17(a), Income Tax Regs. Section
162(a) allows a taxpayer to deduct all ordinary and necessary
business expenses paid or incurred during the taxable year in
carrying on a trade or business. To be “necessary” an expense
must be “appropriate and helpful” to the taxpayer’s business.
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Last modified: May 25, 2011