*46 Decision will be entered under Rule 50.
Deductibility of "nonbusiness" expenses prescribed by Revenue Act of 1942, section 121, held, not to alter principle that expense of traveling between home and office is nondeductible.
*121 By this proceeding petitioner seeks a redetermination of a deficiency in the amount of $ 526.39 in 1941 income tax.
The issue presented is whether petitioner is entitled to a deduction for expenses in connection with the operation of his automobile for the taxable year in question.
*122 FINDINGS OF FACT.
Petitioner, an individual residing in Detroit, Mich., filed his income tax return for the taxable year in question with the collector of internal revenue at Detroit.
Petitioner went to Detroit in the fall of 1939 to become president and chief executive officer of the Allied Products Corporation. Petitioner and his wife came to Detroit from Evanston, Illinois, and took up residence in Detroit in the Whittier Hotel Apartments at 8600 East Jefferson Street, where they continued to reside in 1941.
The Allied Products Corporation*47 owns and operates four manufacturing plants, of which two are located in Detroit and two are located in Hillsdale, Michigan. The Detroit plants are a tool and die shop and a cold forging plant. The Hillsdale plants are a shop for the production of hardened and ground precision parts, and a wire drawing and tool and die shop. The peacetime products of the company are for the most part used in the automobile industry. In 1941 the business also was devoting part of its production to the national defense program and had approximately 1,000 employees.
The executive offices of the corporation are at the Detroit plant, located at 4646 Lawton Avenue on the west side of the city, seven miles from petitioner's residence. The other Detroit plant is approximately three miles from the Lawton Avenue address and is located at 1560 East Milwaukee Avenue, on the east side of the city. Each plant is about four miles distant from the downtown district of Detroit.
Hillsdale is about 100 miles from Detroit. The two plants there are about three miles apart.
The automobile companies with which the corporation did business in 1941 were located in the Detroit area at Pontiac, Flint, and Lansing, Michigan.
*48 As president and chief executive of the Allied Products Corporation petitioner received an aggregate compensation of about $ 32,000 for 1941. He was charged with the general supervision of the business, discussion of problems with various plant managers, the handling of labor relations, and consultation with Government representatives in their offices in downtown Detroit relative to Government business being done with the corporation. It was also necessary for him to make trips to downtown Detroit to consult counsel for the corporation and trips to customers in Flint, Pontiac, and Lansing, Michigan. Petitioner visited the Detroit plants of the corporation every day when in Detroit. He visited the Hillsdale plants at least twice a month. As occasion arose in connection with five or six directors' meetings of the corporation in 1941, petitioner took members of the board on tours of inspection of the various plants. For all of this travel petitioner used his private automobile.
*123 Petitioner employed Fred Jacobs as a full time chauffeur to drive his car. During 1941 he paid him $ 1,440 for such services. Petitioner felt that the employment of a chauffeur was necessary *49 in order to conserve his time and to permit him to discuss business in the car and because petitioner was a newcomer to Detroit. At the time petitioner was elected president of the corporation nothing was said with reference to the use of petitioner's personal car in the business or reimbursement for expenses relating to the car. It was informally understood among the directors that petitioner would have a car of his own to perform his job in the manner they wanted it performed. Petitioner's wife obtained the services of Jacobs through an inquiry of the doorman at their hotel. Petitioner's wife needed a chauffeur to drive her in Detroit. When petitioner was not using the car his wife had access to it and she would be driven downtown at least three or four times a week. The mileage thus consumed does not appear.
During 1941 petitioner's car was operated 16,000 miles. The routine procedure was that the car took petitioner from his apartment to his office every morning and if the car was not needed by the petitioner, as was usually the case, it was driven back to petitioner's home. Some times the car remained at the office to take petitioner to the other plant, after which it *50 was driven home. In the evening the car called for petitioner to take him home, sometimes via the other plant. Such operations of the car required driving the car between 30 and 35 miles each day. During the course of a year's time from 7,000 to 10,000 miles of driving would be consumed for such purposes.
Occasionally in the evening petitioner and his wife would be driven downtown for dinner at their club, to a theatre, or for a visit to a friend's home. For these and like purposes the car would be driven about 3,000 miles during a year.
Petitioner's car in 1941 was a Cadillac 60 sedan special which he acquired in the fall of 1939, exchanging therefor a 1939 Cadillac coupe of a smaller model. The list price of the sedan was $ 2,090, and there were additional costs of approximately $ 410. The car was always well kept and was in excellent condition when it was turned in on a new car on December 28, 1941. It had better treatment than the ordinary car.
The life of the car was about seven years.
In his return for 1941 petitioner claimed deductions for the operation of his car as follows:
| Chauffeur | $ 720.00 |
| Gas, oil and insurance | 149.50 |
| Depreciation | 150.00 |
| Total | 1,019.50 |
*51 These respondent has disallowed.
*124 Total expenses incurred by petitioner in the operation of his automobile during the year were:
| Chauffeur | $ 1,440.00 |
| Gasoline | 276.39 |
| Oil | 30.00 |
| Insurance | 50.00 |
| Depreciation | 357.15 |
| Total | 2,153.54 |
Of this total, one-fourth is deductible as attributable to business use.
OPINION.
Accepting as sufficiently demonstrated the nature and necessity of petitioner's business use of his private automobile, it becomes necessary to allocate the total cost as between personal and business operation in order to ascertain the amount deductible. E. C. O'Rear, 28 B. T. A. 698, 701; affd. (C. C. A., 6th Cir.), 80 Fed. (2d) 473. The evidence, principally that of petitioner himself, does not furnish definite figures. In the findings we have set forth the proportion which seems to us as nearly accurate as can be estimated. Cohan v. Commissioner (C. C. A., 2d Cir.), 39 Fed. (2d) 540.
Assuming a total annual mileage of 16,000, petitioner's testimony requires the conclusion that some 12,000 miles a year were devoted to personal purposes, including his own*52 travel between home and office, evening social use, and his wife's trips in the daytime. The remaining one-fourth is the fraction we have adopted as representing the allocation to business purposes.
Nor can we agree that section 23 (a) (2) of the Internal Revenue Code (Revenue Act of 1942, sec. 121), permitting the deduction of expenses incurred for the production of income, has the effect of limiting the principle that the cost of transportation from home to business is nondeductible. That is a personal expense. E. C. O'Rear, supra.Personal expenses are not deductible, even though somewhat related to one's occupation or the production of income. See Henry C. Smith, 40 B. T. A. 1038; affd. (C. C. A., 2d Cir.), 113 Fed. (2d) 114. And the prohibition of deductions for personal expenses remains unaltered. Sec. 24 (a) (1).
There is no suggestion here that petitioner's occupation was not his "trade or business," and hence the scope of the 1942 amendment does not extend to his situation at all. "A deduction under this section is subject, except for the requirement of being incurred in connection*53 with a trade or business, to all the restrictions and limitations that apply in the case of the deduction under section 23 (a) (1) (A) of an expense paid or incurred in carrying on any trade or business." Report *125 of Senate Finance Committee, S. Rept. No. 1631, 77th Cong., 2d sess., 1942-2 C. B. 504, 571. We think this contention by petitioner, if it be such, must be rejected.
Decision will be entered under Rule 50.