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Andrews v. Commissioner

Citation. Andrews v. Commissioner, 931 F.2d 132, 91-1 U.S. Tax Cas. (CCH) P50,211, 67 A.F.T.R.2d (RIA) 881 (1st Cir. Apr. 24, 1991)
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Brief Fact Summary.

Edward Andrews sought a re-determination from the Tax Court after the Commissioner did not allow him to deduct personal living expenses related to a second business. He lived and worked in Massachusetts building pools part of the year, and lived and worked racing and breeding horses in Florida during the rest of the year.

Synopsis of Rule of Law.

Taxable income should not include the cost of producing that income.


Edward Andrews resided with his wife in Lynnfield, Massachusetts. He purchased in condominium in Pompano Beach, Florida to be used as a residence when in Florida on business. He sold the condominium because the neighborhood became unsafe and moved to a single family home in Lighthouse Point, Florida. He maintained a swimming pool business in Massachusetts and, during the off-season, raced and bred horses in Pompano, Florida. He used the Florida home as his residence when in Florida during the racing season. Andrews and his wife sought deduct travel expenses, including meals and costs, associated with the second home in Florida because they were “in the pursuit of a trade or business. The Commissioner did not allow the deduction and the Andrews’ filed suit seeking a re-determination. The Tax Court held that the Andrews were not “away from home” when the expenses were incurred.


Did the Tax Court improperly affirm the disallowance of the expenses incurred in Florida by considering those to be personal expenses?


Circuit Judge Campbell issued the opinion for the United States First Circuit Court of Appeals in vacating the ruling of the Tax Court, and holding that the living expenses incurred while on business at the Florida house should have been an allowable deduction.


The Court of Appeals found that duplicated living expenses caused by business may be deductible. Andrews was required to travel and incur personal living expenses because of a secondary employment, and those expenses were “a cost of producing income.”

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