Docket No. 936. | B.T.A. | Jan 26, 1927

Lead Opinion

*1183OPINION.

Littleton:

Petitioner claims that the amount of $1,068 was expended in the pursuit of a trade or business and was a proper deduction from his gross income for the year 1922. He did not carry on or conduct any trade or business during the year 1922 at Mobile, Ala., his permanent place of abode. He claims, therefore, that amounts expended for railroad fare, meals, lodging, and laundry were deductible as expenditures “ while away from home in the pursuit of a trade or business.” Section 214 (a) (1) of the Bevenue Act of 1921 provides:

(a) That in computing net income there shall be allowed as deductions:
(1) All the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including a reasonable allowance for salaries or other compensation for personal services actually rendered; traveling expenses (including the entire amount expended for meals and lodging) while away from home in the pursuit of a trade or business; and rentals or other payments required to be made as a condition to the continued use or possession, for purposes of the trade or business, of property to which the taxpayer has not taken or is not taking title or in which he has no equity.

Section 215 (a) (1) of this Act provides:

(a) That in computing net income no deduction shall in any ease be allowed in respect of—
(1) Personal, living, or family expenses.

We think the Commissioner in this case correctly held that railroad fare and living expenses paid out by this petitioner during the year 1922 were not deductible from gross income under the provisions of the above-quoted sections. Section 214 (a) (1) -authorizes a deduction only of ordinary and necessary expenses in carrying on any *1184trade or business, and in this classification are included salaries paid or incurred and traveling expenses, including meals and lodging while away from home in the pursuit, or carrying on, of such trade or business. In the opinion of the Board, traveling and living expenses are deductible under the provisions of this section only while the taxpayer is away from his place of business, employment, or the post or station at which he is employed, in the prosecution, conduct, and carrying on of a trade or business.' A taxpayer may liot keep his place of residence at a point where he is not engaged in carrying on a trade or business, as this petitioner testified was true in this instance, and take a deduction from gross income for his living expenses while away from home. We think section 214 (a) (1) intended to allow a taxpayer a deduction of traveling expenses while away from his post of duty or place of employment on duties connected with his employment. During the taxable year this petitioner was not engaged in the carrying on or pursuit of any trade or business at Mobile. A considerable portion of the expenses claimed were incurred by the petitioner in securing employment and in going from his home to such place of employment, and return, and we think amounts expended in seeking employment or returning to his domicile after the termination of such employment are not deductible under the statute, nor are the amounts expended in going from his place of employment to visit his family a proper deduction from gross income. For practically one and one-half years petitioner was employed at Hammond, La. He was not required to travel in connection with his position as manager, but his work required him to remain at Hammond until the period for which he was employed had ended. The same was true in respect to his employment at Houston for nine months. When he was not so employed he was carrying on no trade or business, according to his own testimony. The deduction of amounts expended for railroad fare, meals, and lodging, as ordinary and necessary expenses, depends in each case upon the relation of such expenditures to the trade or business in connection with which they are paid or incurred, and no hard and fast rule can be laid down to cover all cases, It is the opinion of the Board, from the evidence in this proceeding, that the amounts expended by the petitioner fall within the purview of section 215 (a) (1) of the Eevenue Act of 1921 and not within the purview of section 214 (a) (1) of that Act, and, therefore, are not deductible from gross income.

Judgment will he entered for the Commissioner,

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