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2. Miscellaneous Itemized Deductions
On his 2002 Schedule A, petitioner deducted unreimbursed
employee business expenses of $27,689. Respondent determined
that petitioner did not adequately substantiate any of the
claimed unreimbursed employee business expenses. In the
alternative, respondent argued that if petitioner did
substantiate the unreimbursed employee business expenses,
petitioner is not entitled to deduct such expenses pursuant to
section 162(a)(2) because the expenses were not incurred away
from home.
Before we determine whether petitioner has substantiated his
claimed unreimbursed employee business expenses, we first decide
whether petitioner incurred these expenses away from home.
A taxpayer generally may not deduct personal, living, and
family expenses. Sec. 262(a). However, section 162(a) allows a
taxpayer to deduct all ordinary and necessary business expenses
paid or incurred during the taxable year in carrying on any trade
or business. To be “necessary” an expense must be “appropriate
and helpful” to the taxpayer’s business. Welch v. Helvering, 290
U.S. at 113-114. To be “ordinary” the transaction which gives
rise to the expense must be of a common or frequent occurrence in
the type of business involved. Deputy v. Du Pont, 308 U.S. 488,
495 (1940).
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Last modified: May 25, 2011