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the owner of an unincorporated business like Mr. Eyler, is
entitled to deduct all the ordinary and necessary expenses paid
or incurred during the taxable year in carrying on a trade or
business, sec. 162(a), including any amount paid to an employee
pursuant to an employee benefit plan for an expense that such
employee pays or incurs, sec. 162(a)(1); sec. 1.162-10, Income
Tax Regs.8 However, a taxpayer, like Mr. Eyler, who owns an
unincorporated business is not entitled to deduct health insur-
ance costs that he pays or incurs for himself, his spouse, and
his dependents except as provided in section 162(l).9
8See Albers v. Commissioner, T.C. Memo. 2007-144; Francis v.
Commissioner, T.C. Memo. 2007-33.
9As applicable here, sec. 162(l)(1) provides that a tax-
payer, like Mr. Eyler, is entitled to deduct 60 percent of any
amount that such taxpayer paid or incurred during 2001 for
insurance that constituted medical care for such taxpayer, such
taxpayer’s spouse, and such taxpayer’s children. Sec. 162(l)
provides in pertinent part:
SEC. 162. TRADE OR BUSINESS EXPENSES.
* * * * * * *
(l) Special Rules for Health Insurance Costs of
Self-Employed Individuals.--
(1) Allowance of deduction.--
(A) In general.–-In the case of an indi-
vidual who is an employee within the meaning
of section 401(c)(1), there shall be allowed
as a deduction under this section an amount
equal to the applicable percentage of the
amount paid during the taxable year for in-
surance which constitutes medical care for
(continued...)
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