128 T.C. No. 1
UNITED STATES TAX COURT
JULIE A. TOTH, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 12452-04, 12862-04. Filed January 18, 2007.
P began operating a horse boarding and training
facility for profit in 1998. P has continued carrying
on these activities through the date of trial. P
claims the expenses paid for these activities are
deductible pursuant to sec. 212, I.R.C., in 1998 and
2001, the years at issue.
R denied the deductions, claiming that the
expenses were nondeductible startup expenditures under
sec. 195(a), I.R.C., which must be capitalized because
they were incurred in anticipation of the sec. 212,
I.R.C., activity’s becoming a trade or business.
Held: Sec. 195(a), I.R.C., does not require the
expenses of P’s sec. 212, I.R.C., activity to be
capitalized as startup expenditures. The expenses paid
or incurred in the sec. 212, I.R.C., activity are
deductible.
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