Magazine article The CPA Journal

Tax Court Allows Deduction for Transportation Expenses between Residence and Work

Magazine article The CPA Journal

Tax Court Allows Deduction for Transportation Expenses between Residence and Work

Article excerpt

The Tax Court recently allowed a deduction for transportation expenses between a taxpayer's residence and temporary work locations because the residence was a "regular place of business" under Rev. Rul. 90-23. In Walker v. Commissioner, 101 T.C.--. No. 36 (December 13, 1993), the court ruled that although Walker was not entitled to the deduction under existing case law, the revenue ruling created an exception that permitted the deduction.

Several rules govern the deductibility of transportation expenses. In general, commuting between one's residence and regular work location is a nondeductible personal expense under IRC Sec. 262(a). However, transportation expenses between different work locations are deductible as ordinary and necessary business expenses under IRC Sec. 162(a). Therefore, if a residence qualities as one's "principal place of business" under IRC Sec. 280A, then transportation expenses between it and other work locations are deductible. In addition, there are two revenue rulings concerning transportation expenses. The first, Rev. Rul. 53-190, allows a taxpayer who is not regularly employed at any specific location to deduct transportation expenses between the taxpayers's residence and a temporary work location outside of the metropolitan area in which he or she usually works. The second, Rev. Rul. 90-23, allows a taxpayer to deduct transportation expenses between the taxpayer's residence and temporary work locations, regardless of the distance, if the taxpayer has one or more "regular places of business."

A "principal" place of business is typically the location where services are rendered. (See "Supreme Court Denies Home Office Deduction" in the April 1393 issue of The CPA Journal. …

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