Schulz v. Commissioner
United States Tax Court
Entertainment expenses are deductible only if they are in fact ordinary and necessary expenses for carrying on a trade or business and, to the extent that they are primarily social and personal in nature and bear no direct relation to the operation of a business, such expenditures may not be deducted.
1Opinion of the Court
OPINION.
ARUNdell, Judge:
The respondent has disallowed as a deduction from the petitioner’s 1945 taxable income the sum of $9,304.40 claimed as entertainment expense, and a $400 item claimed as advertising expense. There is no serious dispute as to whether either of these sums was spent; the issue is whether they are deductible.
Entertainment expenses are allowed as a deduction from gross income only to the extent that they are “ordinary and necessary” in carrying on a trade or business. Section 23 (a) (1) 1 of the Internal Revenue Code. The requirements that the expense must be both ordinary…
2Cases cited2 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Commissioner v. HeiningerSupreme Court of the United States · 1943
3Cited by9 opinions
- Finney v. CommissionerUnited States Tax Court · 1980
- De Vito v. CommissionerUnited States Tax Court · 1979
- Detko v. CommissionerUnited States Tax Court · 1987
- Gardner v. CommissionerUnited States Tax Court · 1983
- Gill v. CommissionerUnited States Tax Court · 1994
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