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taxes on Schedule A. Secs. 164(a)(1), 183(b)(1). Petitioner’s
deductions for depreciation and the remaining expenses claimed on
Schedule E, to the extent not conceded by respondent, are
disallowed under section 183(a).
Section 162
Although not raised by either party, the Court will briefly
examine whether petitioner may claim the deductions relating to
the cottage as unreimbursed employee business expenses under
section 162(a).
Taxpayers may deduct “ordinary and necessary” expenses paid
or incurred during the taxable year in carrying on a trade or
business. Sec. 162(a). Services performed by an employee
constitute a trade or business for this purpose. O’Malley v.
Commissioner, 91 T.C. 352, 363-364 (1988). An employee cannot
deduct trade or business expenses to the extent that the employee
is entitled to reimbursement from her employer for expenditures
related to her status as an employee. Lucas v. Commissioner, 79
T.C. 1, 6 (1982).
An “ordinary” expense is one that is common and acceptable
in the particular business. Welch v. Helvering, 290 U.S. at 113-
114. A “necessary” expense is an expense that is appropriate and
helpful in carrying on a trade or business. Heineman v.
Commissioner, 82 T.C. 538, 543 (1984). Whether an amount claimed
constitutes an ordinary and necessary expense as an employee
business expense is a question of fact to be determined from the
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