Respondent also disallowed the 1992 deductions for car and truck, repair and maintenance, and utility expenses, as well as the 1993 deductions for interest and travel expenses. To be deductible, the expenditure must be an ordinary and necessary expenditure of the business. An expense is ordinary if it is customary or usual within a particular trade, business, or industry. An expense is necessary if it is appropriate and helpful for the business. Section 262 disallows deductions for personal, living, or family expenses.
Petitioners bear the burden of proving their entitlement to the deductions.
On the whole, it is readily apparent that petitioners have used their day-care service as a means to deduct virtually all of their personal expenses. For example, petitioners in 1993 deducted the cost of 632 meals as business expenses. He stated that petitioners went to restaurants to plan their weekly activities for the d4y-care service. He also testified that petitioners ate alone during a majority of these meals. We went - we would go to parks and see people with the children.