One of the issues in a recent Tax Court memo decision involved leased vehicle deductions on personally owned vehicles used by a dentist and his wife but claimed on the dental practice's S Corporation return. Taxpayer argued that the vehicles were driven solely for business purposes, even by his wife, because he had applied veneers (cosmetic dental applications) to her teeth and anytime she drove a vehicle she was "a walking, talking billboard for the dental office." In addition each vehicle had a license plate holder displaying the name of the dental practice, which taxpayer insisted provided a valuable advertising service. The Tax Court ruled against the lease deductions citing taxpayer's failure to maintain adequate records to substantiate the business use of the vehicles by only offering handwritten calendars of daily work schedules with no allocations for personal and commuting use of vehicles. C. Michael Willock , TC Memo 2010-75 (Tax Ct.).
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