Donaldson v. Commissioner

*231 For the years 1923 and 1924 the Commissioner determined deficiencies in the petitioner's income tax of $3,957.52 and $2,207.44, respectively. The only issue relates to certain deductions claimed by the petitioner as expenses incident to the maintenance and operation of an automobile in his business.

FINDINGS OF FACT.

The petitioner is an individual who resides in Washington, D.C. During the taxable years he was president of the Commercial National Bank, chairman of the board of directors of the Mount Vernon Savings Bank, vice president of the District Securities Co. and a member of the law firm of Donaldson & Johnson, which also did a general brokerage business in the way of securing large loans on real estate.

During these years the petitioner owned two automobiles, one of which was used by the members of his family and by him for purposes not connected*2093 with his business. The other he had for his exclusive use for trips in connection with his business. He suffered from arthritis and he found it necessary to have a car always available to him during his business day. He had an office in the same building with the Commercial National Bank, and when his car was not in use it stood in front of this building. In the course f a day the petitioner usually had to make several trips to the Mount Vernon Savings Bank and several trips to inspect various pieces of property in various parts of the city in connection with loans to be made either by one of the banks in which he was interested or by clients of his law firm. In making these trips he used his business car with the chauffeur and it was for the purpose of making these trips as expeditiously as possible that he maintained the business car and chauffeur.

He employed a chauffeur for each car. The chauffeur for the business car during the taxable years was paid a salary of at least $125 a month for the 24 months here involved. Storage charges on this car for each year amounted to $360. At least $1,860 (the yearly total of the above two items) was paid by the petitioner in each*2094 of the taxable years in connection with the operation of his business automobile and such payments were ordinary and necessary expenses paid during the taxable years in carrying on his business. The Commissioner did not allow any deductions for automobile expenses for either of the years involved.

OPINION.

MURDOCK: The petitioner, when asked on cross-examination whether during the taxable years he or any member of his family *232 had ever used his business car for some purpose not connected with his business, admitted that it was possible that one or two such short trips might have been made in the car in each year, but from the evidence as a whole we are satisfied that any such use was so inconsequential as to require no further consideration in this case. The petitioner also admitted that in the morning he rode in the car from his residence to his place of business and made the return trip at night. This Board has held that where an automobile is used for such purposes, the expenses incident thereto are not ordinary and necessary expenses of a trade or business. However, the present case is distinguished from those cases by the fact that here it so happens that the*2095 petitioner's automobile was stored in a public garage close to his residence, which garage was not a great distance from the petitioner's place of business, and in riding to and from his place of business he did not thereby increase the amount of the expenses of the automobile which he otherwise would have been entitled to deduct. Cf. . He undoubtedly had additional expenses, the amount of which he would be entitled to deduct, and he would also be entitled to deduct some amount for depreciation on this automobile, but from the evidence we are unable to determine the amount of the additional expenses or a proper allowance for depreciation of the automobile.

Judgment will be entered under Rule 50.