Magazine article The CPA Journal

Victory for Peripatetic Taxpayers

Magazine article The CPA Journal

Victory for Peripatetic Taxpayers

Article excerpt

The First Circuit Court of Appeals has ruled that the Tax Court erred in concluding that a taxpayer who divided his year between two businesses located in two states had two tax homes. (Andrews v. Commissioner, No. 90-2165, First Circuit 4/24/91.) The taxpayer was president and CEO of a swimming pool construction business in Massachusetts. Over time he began to race and breed horses, first in Massachusetts and later in Florida. Then he purchased a swimming pool construction business in Florida. He acquired residential property in Florida that he used there while training and racing his horses and managing the swimming pool business.

After considering these facts, the Tax Court concluded that the taxpayer had two tax homes, one in Florida and the other in Massachusetts. As a result, it disallowed the taxpayer's "away from home" travel expenses incurred in Florida. The First Circuit vacated the Tax Court decision, stating that it is inconsistent with the well-settled policy of Sec. 162(a)(2) that duplicated living expenses necessitated by business are deductible. …

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