Charles H. Carter and Virgie Ann Carter v. Commissioner of Internal Revenue

The appellants, Charles and Virgie Ann Carter, appeal from the Tax Court’s denial of their claims for business tax deductions under Section 162 of the Internal Revenue .Code of 1954 (I.R.C. § 162) for the taxable years 1971 to 1973. The Commissioner of Internal Revenue disallowed their claimed business deductions for the operating expenses of their yacht and for Mrs. Carter’s tuition expenses. The Tax Court upheld the deficiencies to the extent of $11,860. For the reasons stated below, we concur with the findings of the Tax Court and affirm its judgment.

I

FACTUAL BACKGROUND

In 1966, the Carters began to plan a voyage around the world to commence in the summer of 1971. Pursuant to those plans, they purchased á yacht, took courses in seamanship and embarked on cruises to San Francisco, Acapulco and Hawaii. In 1971, Mr. Carter, who practiced law from 1946 to 1971, became an inactive partner in his law firm to avoid potential health problems which could result from the pressures of his career. Mrs. Carter, who had taught enrichment courses as a resource teacher during the 1970-71 school term, entered a Master’s of Education program.

In August of 1971, appellants and their three…