Herbert K. Stevens and Mrs. Herbert K. L. L. Stevens v. Commissioner of Internal Revenue

Taxpayer appeals from a judgment of the Tax Court of the United States denying certain deductions as ordinary and necessary business expenses under § 162 of the Internal Revenue Code of 1954. The question presented by the petition is whether the cost of maintaining and training race horses can be deducted from the gross income of the taxpayer as ordinary and necessary business expenses where the maintenance and training were provided as consideration for a half interest in the horses. The Tax Court held that one-half of the expense of maintenance and training must be capitalized as the…