*2525 Petitioner's claim for additional deduction from gross income on account of automobile expenses disallowed.
*694 The respondent has asserted deficiencies in the petitioner's income taxes for the years 1920 and 1921 in the respective amounts of $357.96 and $254.78. The deficiencies arise from the disallowance by respondent of $1,500 and $1,000, respectively, in the years 1920 and 1921, as part of petitioner's deductions from gross income, for ordinary and necessary business expenses of the proportionate part of the cost of upkeep and depreciation of an automobile used by petitioner both in connection with his business and for personal purposes.
FINDINGS OF FACT.
The petitioner is an individual residing in the City of New York. During the taxable years he was sales manager and a member of the firm of Adler & Ast, a partnership, and treasurer of the A. Adler Co., a corporation, which concerns were engaged in the manufacture of ladies' dresses.
In November, 1919, petitioner purchased a Cadillac limousine automobile at a cost of $5,610.63, which*2526 he afterwards used for personal purposes at night and on the week-ends and, in connection with the business, to entertain customers, deliver packages, and drive between the different factories. It was also used in going between his home and place of business. Petitioner was neither reimbursed by the partnership nor by the corporation. The expenses, including depreciation, were as follow:
| 1920 | 1921 | |
| Chauffeur's salary | $1,938.00 | $1,845.00 |
| Storage, gasoline, etc | 1,579.91 | 1,375.93 |
| Insurance | 400.68 | 407.62 |
| License | 33.95 | 65.90 |
| Tires and battery | 175.70 | 336.68 |
| Repairs | 239.84 | 42.29 |
| Chauffeur's uniform | 88.95 | |
| Chains | 29.00 | |
| Painting and overhauling | 644.95 | |
| 4,426.03 | 4,718.37 | |
| Depreciation | 1,200.00 | 1,000.00 |
| 5,626.03 | 5,718.37 |
*695 In his income-tax return for 1920 petitioner claimed traveling and entertainment expenses of $1,500, and proportion of operation of automobile for use in business, $2,500. In his return for 1921 petitioner claimed traveling and entertainment expenses of $1,500 and proportion of operation of automobile $2,000. Petitioner did not pay any traveling expenses for which he was not reimbursed by the firm. The*2527 amounts claimed as traveling and entertainment expenses in his income-tax returns for both 1920 and 1921 in fact represented a part of the item of proportion of operation of automobile for use in the business, which makes a total of $4,000 for 1920 and $3,500 for 1921. The separation in the income-tax returns into the items above mentioned was made arbitrarily by petitioner's bookkeeper. The sum of $4,000, or about 70 per cent of the $5,626.63 is the estimated proportion of the expense for the business use in 1920 and $3,500, or about 60 per cent of the $5,718.37 is the estimated proportion of the expense for the business use in 1921. The respondent has allowed $2,500 for 1920 and $2,500 for 1921, disallowing $1,500 and $1,000, respectively.
OPINION.
LANSDON: Petitioner claims that there should be deducted from his gross income, as ordinary and necessary business expenses, 60 to 70 per cent of the items of automobile expenses, hereinbefore set forth. The respondent has allowed a deduction of approximately 45 per cent. While there seems to be no doubt that the automobile was used to some unknown extent in connection with the business, it was also used to a large extent for*2528 personal purposes. Expense incurred by petitioner in going between his residence and place of business is not an ordinary and necessary business expense. ; . The evidence does not establish that the portion of the expense to be allocated to the business is more than the amounts allowed as deductions by the respondent.
It does not appear that petitioner's compensation was fixed by the firm with a view of requiring him to maintain this automobile for the use of the business. ; ; .
Judgment will be entered for the respondent on 15 days' notice, under Rule 50.
Considered by STERNHAGEN, GREEN, and ARUNDELL.