Respondent contends that petitioner voluntarily used his airplane and assumed the airplane expenses and, therefore, is not entitled to the claimed deductions. Petitioners argue that there was no voluntary assumption of corporate obligations because the airplane was used and the expenses were incurred pursuant to written corporate policy. ³ We agree with petitioners.

1991 U.S. Tax Ct. LEXIS 108">*131 Respondent's Revenue Ruling 57-502, 1957-2 C.B. 118, acknowledges that a corporate resolution or policy requiring a corporate officer to assume such expenses indicates that they are his expenses as opposed to those of the corporation. 97 T.C. 670">*684 In Gantner, we disallowed the taxpayer's deduction for expenses and depreciation related to a computer system which he purchased and used in the operation of the Northstar Driving School, Inc. The taxpayer was an officer and a 50-percent shareholder of Northstar. Even though the taxpayer used the equipment in his employment with the corporation, we found that the deductions were not attributable to the taxpayer's role as an employee noting that "There was no corporate resolution or requirement that petitioner, as an employee, incur those expenses." Gantner v. Commissioner, 91 T.C. 713">91 T.C. 726. Similarly, in Stolk v. Commissioner, 40 T.C. 345">40 T.C. 345 (1963), affd. 326 F.2d 760">326 F.2d 760 (2d Cir. 1964), we disallowed a corporate officer's deduction of expenditures for entertainment and gifts, in part, for the taxpayer's failure "to prove that as part of his duties the corporation expected1991 U.S. Tax Ct. LEXIS 108">*132 or required him to assume and pay from his own funds any of the disputed expenses, without payment." Stolk v. Commissioner, 40 T.C. 345">40 T.C. 357.

In Lockwood v. Commissioner, T.C. Memo. 1970-141, the taxpayer was an officer of Momex, Inc., but not a shareholder. The taxpayer's wife was a 25-percent shareholder in Momex but not an employee. The shareholders and officers of Momex agreed that the officers would pay out of their own pocket, without corporate reimbursement, certain travel and entertainment expenses incurred by them on behalf of the corporation. We held that the taxpayer's travel expenses incurred on behalf of the corporation were deductible. ⁴

1991 U.S. Tax Ct. LEXIS 108">*133 In the instant case, Intel had a written travel reimbursement policy explicitly stating that it expected its officers to incur certain expenses for Intel's benefit, despite the fact that such expenses would not be reimbursed. Reimbursement of such expenses was considered inappropriate in light of the corporate culture and the officers' overall compensation. 97 T.C. 670">*685 An example of such expenses is the excess cost of first-class airfare over coach airfare when first-class travel was necessary for business purposes. We find that Intel expected petitioner, as a corporate official, to incur and pay travel expenses in excess of the amount which was reimbursable under its policy. Therefore, we hold that petitioner's use of the airplane and payment of the attendant expenses do not constitute the voluntary assumption of corporate expenses.

Respondent argues that by virtue of petitioner's position as founder and chief executive officer of Intel and his involvement in the development of its corporate culture, petitioner, in effect, required himself to assume the travel expenses and, therefore, such assumption was voluntary.

The Intel culture and travel policies that precluded Intel's payment of1991 U.S. Tax Ct. LEXIS 108">*134 petitioner's total travel costs were in place prior to petitioner's purchase and use of the airplane and were clearly policies that were established for business purposes. In order to find that petitioner required himself to assume the travel expenses, we would have to ignore the corporate entity of Intel. Courts have consistently interpreted Moline Properties, Inc. v. Commissioner, 319 U.S. 436">319 U.S. 436, 87 L. Ed. 1499">87 L. Ed. 1499, 63 S. Ct. 1132">63 S. Ct. 1132 (1943), to preclude ignoring the corporate form when adoption of that form served a business purpose. Moncrief v. United States, 730 F.2d 276">730 F.2d 276, 730 F.2d 276">280 (5th Cir. 1984). Respondent has not argued, nor could it be seriously contended, that Intel served no business purpose. Therefore, despite petitioner's participation in establishing the Intel policy, we find he did not "voluntarily assume" the travel expenses.

Having found that the use and expenses of the airplane were not corporate obligations which were voluntarily assumed, we must decide if the expenses are ordinary and necessary expenses of petitioner's employment. An expense is necessary if it is appropriate and helpful in carrying on the trade or business. Heineman v. Commissioner, 82 T.C. 538">82 T.C. 538, 82 T.C. 538">543 (1984)1991 U.S. Tax Ct. LEXIS 108">*135 (citing Commissioner v. Tellier, 383 U.S. 687">383 U.S. 687, 383 U.S. 687">689, 16 L. Ed. 2d 185">16 L. Ed. 2d 185, 86 S. Ct. 1118">86 S. Ct. 1118 (1966); Welch v. Helvering, 290 U.S. 111">290 U.S. at 113). An expense is ordinary when the paying thereof is the common and accepted practice in light of the time and place and circumstance. 290 U.S. 111">Welch v. Helvering, supra at 113-114.

97 T.C. 670">*686 In Revenue Ruling 70-558, 1970-2 C.B. 35, respondent held that a Federal Government employee who used his privately owned airplane on official business trips was entitled to deduct expenses and depreciation allocable to such use to the extent those amounts exceeded the standard rate travel reimbursements received from the Government. The taxpayer in Revenue Ruling 70-558 was not required by his employer to use his private airplane but was permitted to do so because of the urgency of his trips. For purposes of determining whether petitioner's use of his airplane was ordinary and necessary, we can discern no meaningful distinction between his situation and the facts in Revenue Ruling 70-558.

It is undisputed that petitioner's duties as vice chairman of Intel required frequent1991 U.S. Tax Ct. LEXIS 108">*136 and extensive travel, some of which was not regularly or easily scheduled. Furthermore, the parties agree that petitioner's access to the airplane enabled him to reduce significantly his traveling time, thereby allowing him to attend an increased number of meetings and make an increased number of appearances. Consequently, there can be little dispute that use of the airplane was "appropriate and helpful" to the execution of petitioner's duties. Furthermore, respondent's Revenue Ruling 57-502, 1957-2 C.B. 118, states that "a resolution requiring the assumption of such expenses by * * * [a corporate officer] would tend to indicate that they are a necessary expense of his office." Based on all of the foregoing, we find the airplane expenses for the Intel flights were a necessary expense of petitioner's business as a corporate official.

The expenses of using the airplane must also be ordinary in order to be deductible. 290 U.S. 111">Welch v. Helvering, supra at 113. The principal function of the word "ordinary" in section 162(a) is to clarify the distinction between expenses which are currently deductible and expenses which are capital in nature. 1991 U.S. Tax Ct. LEXIS 108">*137 Commissioner v. Tellier, 383 U.S. 687">383 U.S. 687, 383 U.S. 687">689, 16 L. Ed. 2d 185">16 L. Ed. 2d 185, 86 S. Ct. 1118">86 S. Ct. 1118 (1966). The expenses at issue here were not incurred in the acquisition of a capital asset but in the conduct of petitioner's duties as an employee of Intel.

Petitioner traveled by private aircraft only when there was business advantage in doing so. The cost of replicating 97 T.C. 670">*687 petitioner's travel schedule and time savings via commercial charter carrier would have exceeded the costs of operating petitioner's airplane. In light of Intel's policies and petitioner's travel requirements, we hold that payment of the excess travel expenses arising from petitioner's use of the airplane was ordinary under the circumstances. See Lockwood v. Commissioner, supra.

It has been held that for an expense to be considered ordinary and necessary, it must also be reasonable in amount. Commissioner v. Lincoln Electric Co., 176 F.2d 815">176 F.2d 815, 176 F.2d 815">817 (6th Cir. 1949); see sec. 1.162-2(a), Income Tax Regs. Respondent argues that the expenses are not ordinary and necessary because petitioners' claimed deduction of $ 139,369 in connection with the airplane is unreasonable in light of the $ 105,076 salary petitioner1991 U.S. Tax Ct. LEXIS 108">*138 was paid as vice chairman of Intel in 1983. ⁵ The issue here is whether the Intel-related airplane expenses are reasonable in amount. Petitioners argue that in determining reasonableness of the amount of business expenses for purposes of section 162, only out-of-pocket expenses should be considered and that the statutory allowance for depreciation should be excluded from consideration. For purposes of this issue, the $ 139,369 figure, which respondent relies on, can be broken down as follows:

Whether depreciation should be included in the amount of expenses in making a reasonableness determination depends on whether it is a "business expense" under section 162. The regulations1991 U.S. Tax Ct. LEXIS 108">*139 under section 162 provide in relevant part that "Business expenses deductible from gross income include the ordinary and necessary expenditures directly connected with or pertaining to the taxpayer's trade or business, except items which are used as the basis for a deduction or a credit under provisions of law other than 97 T.C. 670">*688 section 162." Sec. 1.162-1(a), Income Tax Regs.⁶ (Emphasis added.) Depreciation is not really an "expenditure" but an allowance based on a presumed wasting of a previous capital investment. See 5 Mertens, Law of Federal Income Taxation, sec. 23A.03, at 14 (1974 rev.). The authority for deducting an allowance for depreciation in this case is section 168. Therefore, depreciation does not fall under the regulatory rubric of trade or business expense. As such, the section 168 depreciation deduction amount should not be included in the amount of business expense, the reasonableness of which is to be determined.

1991 U.S. Tax Ct. LEXIS 108">*140 To hold otherwise would raise serious problems since allowable deductions for depreciation will often not be reflective of economic depreciation. If we were to look simply at the combination of allowable depreciation deductions and other expenditures for a particular year, the combination of these amounts might often seem exorbitant in amount, especially in the early years of operation. Respondent has not argued that we should consider actual economic depreciation. In the instant case, however, the $ 96,722 depreciation allowance did not reflect actual economic depreciation. The airplane did not decrease in value but increased in value by approximately $ 340,000 from 1983 to 1989. Therefore, petitioner did not suffer an actual economic loss in addition to his out-of-pocket expenditures of $ 23,140.

The issue then is whether the $ 23,140 expended for Intel flights is a reasonable amount of expense under the circumstances. Whether an expenditure is reasonable or not for purposes of section 162 is a question of fact. Boser v. Commissioner, 77 T.C. 1124">77 T.C. 1124, 77 T.C. 1124">1133 (1981), as amended 79 T.C. II (1982), affd. by unreported order (9th Cir., Dec. 22, 1983). We do 1991 U.S. Tax Ct. LEXIS 108">*141 not find the amount of business expense to be unreasonable. The parties have stipulated to the fact that replication of petitioner's private airplane flights through a commercial service would have been more costly. Therefore, we hold petitioners are entitled to deduct petitioner's 97 T.C. 670">*689 out-of-pocket expenses of operating the airplane with respect to the Intel-related flights to the extent they exceed the reimbursable expenses.

With respect to depreciation, respondent states on brief that he "agrees that if the Court finds that the petitioner flying his own plane is ordinary and necessary that the amount of depreciation is reasonable." Nevertheless, respondent appears to argue that whether depreciation is deductible at all is dependent on whether the asset's use is "ordinary and necessary," and that the combined amount of deductions for depreciation and business expense must be "reasonable" in order to be "ordinary and necessary." Such a position is without support in the law.

Availability of deductions for depreciation on tangible property in this case is dependent solely upon compliance with section 168, which has only two requirements for deduction of depreciation. First, the asset1991 U.S. Tax Ct. LEXIS 108">*142 (tangible) must be of a type which is subject to wear and tear, decay, decline, or exhaustion. Sec. 168(c); sec. 1.167(a)-2, Income Tax Regs. Second, the property must be used in the taxpayer's trade or business or held for the production of income. Sec. 168(c)(1). The language of the section is unequivocal.

IRC Sec. 168. ACCELERATED COST RECOVERY SYSTEM.

(a) Allowance of Deduction. -- There shall be allowed as a deduction for any taxable year the amount determined under this section with respect to recovery property.

(b) Amount of Deduction. --

(1) In general. -- Except as otherwise provided in this section, the amount of the deduction allowable by subsection (a) for any taxable year shall be the aggregate amount determined by applying to the unadjusted basis of recovery property the applicable percentage determined in accordance with the following table:

* * *

(c) Recovery Property. -- For purposes of this title --

(1) Recovery Property Defined. -- Except as provided in subsection (e), the term "recovery property" means tangible property of a character subject to the allowance for depreciation --

Subsequent legislative enactments and the accompanying legislative history support our finding that there are no requirements for deducting depreciation allowances other than those imposed by section 168. ⁷ In 1984, as part of the Deficit Reduction Act of 1984, Pub. L. 98-369, 98 Stat 494, Congress added section 280F to the Internal Revenue Code. This section places limitations on the investment tax credit and depreciation deductions that may be taken for luxury automobiles and certain listed property used by taxpayers in their trade or business. Sec. 280F.

1991 U.S. Tax Ct. LEXIS 108">*144 With respect to depreciation of luxury automobiles, the House Report stated that under the then current law:

A taxpayer who acquires an automobile for use in a trade or business and uses it for business purposes is entitled to an investment tax credit and cost recovery deductions under the Accelerated Cost Recovery System (ACRS), in addition to deductions for operating and maintenance expenses.

* * *

Finally, we note that respondent has unsuccessfully made this argument before this Court on a prior occasion. In Hoye v. Commissioner, T.C. Memo. 1990-57, the language of respondent's statutory notice conditioned allowance of the deduction for depreciation and investment tax credit upon a motor home being "ordinary or necessary1991 U.S. Tax Ct. LEXIS 108">*146 to [taxpayer's] trade or business, in accordance with section 162." We characterized that position as untenable. At trial and on brief, respondent argued instead that the taxpayers were not entitled to the depreciation deduction or investment tax credit because the amounts claimed were unreasonable. We observed that the cases on which respondent relied involved section 162, and that the taxpayers were entitled to depreciation if the property was used in their trade or business. Since respondent did not challenge the fact that the motor home was used in the taxpayer's trade or business, we held that the taxpayers were entitled to deduct depreciation to the extent the motor home was used in his trade or business. Hoye v. Commissioner, supra.

Based on the foregoing, we find that petitioners are entitled to deduct depreciation on the airplane to the extent of its use in petitioner's employment.

Petitioners also seek to deduct the depreciation and expenses related to petitioner's use of the airplane for flight training. Although expenses for education are not explicitly referred to in section 162, the regulations provide guidelines for determining whether1991 U.S. Tax Ct. LEXIS 108">*147 such expenses are deductible. Sec. 1.162-5, Income Tax Regs. Generally, education expenses are deductible if the education maintains or improves the skills required in the employment of the taxpayer, or if the education meets the express requirements of the taxpayer's employer imposed as a condition to the retention of employment. Sec. 1.162-5(a)(1) and (2), Income Tax Regs.

97 T.C. 670">*692 Whether education maintains or improves skills required by the taxpayer's employment must be determined from all of the facts and circumstances involved. Boser v. Commissioner, 77 T.C. 1124">77 T.C. 1131. This Court has found flight-training expenses deductible for taxpayers not in the trade or business of flying and taxpayers not required by their employers to have that particular skill. See 77 T.C. 1124">Boser v. Commissioner, supra; Behm v. Commissioner, T.C. Memo. 1987-157. However, the taxpayers in those cases established a substantial nexus between the training and the skills required in their employment. Here, petitioners have failed to establish such a nexus. Petitioner's use of the airplane with respect to his employment with Intel constituted only 31.51991 U.S. Tax Ct. LEXIS 108">*148 percent of the airplane's use in 1983. The record does not reflect how often petitioner piloted the airplane on these trips. Clearly, there was no requirement that he do so. It is clear that a significant portion of the airplane's use was personal. On the basis of the record before us, we find that petitioners have failed to prove they are entitled to deduct expenses and depreciation related to petitioner's flight training as an educational expense under section 162.

The next issue for decision is whether the expense and depreciation related to the maintenance flights may be deducted.⁹ Respondent contends depreciation and expense for the maintenance flights are not deductible as they occurred prior to commencing operations of the charter business. It is well established that expenses incurred before a taxpayer's business begins to operate (startup expenses) are not deductible. Richmond Television Corp. v. United States, 345 F.2d 901">345 F.2d 901 (4th Cir. 1965), vacated and remanded on other issues 382 U.S. 6886">382 U.S. 6886 S. Ct. 233, 15 L. Ed. 2d 143">15 L. Ed. 2d 143 (1965), original holding on this issue reaffd. 354 F.2d 410">354 F.2d 410 (4th Cir. 1965), overruled on other grounds NCNB Corp. v. United States, 684 F.2d 285">684 F.2d 285 (4th Cir. 1982).1991 U.S. Tax Ct. LEXIS 108">*149 Nor is depreciation allowed on assets acquired for a business that has not begun operations. Piggly Wiggly Southern, Inc. v. Commissioner, 84 T.C. 739">84 T.C. 739, 84 T.C. 739">745-746 (1985) (citing 345 F.2d 901">Richmond Television Corp. v. United States, supra), affd. 803 F.2d 1572">803 F.2d 1572 (11th Cir. 1986).

97 T.C. 670">*693 Petitioner has not established that the charter business began operations prior to October 1983. Petitioner testified that the maintenance flights were related to the installation, testing, and maintenance of the airplane and newly installed equipment in preparation of employing the airplane in the ACM charter business. ¹⁰ Consequently, no deduction for depreciation may be taken with respect to these flights. The expenditures related to such maintenance flights were startup expenses and, therefore, were not deductible.

1991 U.S. Tax Ct. LEXIS 108">*150 We must now determine the total allowable amount of deductible expenses and depreciation with respect to the use of the airplane in 1983. Unless a taxpayer can prove the actual business expenses, only that percentage of the total expense attributable to the business use is deductible. See Cobb v. Commissioner, 77 T.C. 1096">77 T.C. 1096, 77 T.C. 1096">1101-1102 (1981); Henry Schwartz Corp. v. Commissioner, 60 T.C. 728">60 T.C. 728, 60 T.C. 728">744 (1973). Similarly, petitioners are entitled to a depreciation deduction measured by the percentage of business use. 60 T.C. 728">Henry Schwartz Corp. v. Commissioner, supra.

The parties disagree on whether the flight hours for maintenance, ACM crew training, and delivery ¹¹ should be included in the denominator of the business-use ratio used to determine total allowable depreciation. Respondent asserts that the hours should be included while petitioners contend that such inclusion is tantamount to treating those hours as personal-use hours, which they argue is improper. We agree with respondent.

1991 U.S. Tax Ct. LEXIS 108">*151 Petitioners cite no authority on point in support of their position. As a matter of mathematics, failure to include the flight hours at issue in the denominator of the business-use ratio effectively allows some depreciation for those flight hours. While use of the asset for startup purposes is not a personal use, it is, nonetheless, a use of the asset and should not be excluded from the business-use ratio. See Richmond Television Corp. v. Commissioner, supra; 84 T.C. 739">Piggly Wiggly Southern, Inc. v. Commissioner, supra.

Based on the preceding, we hold that all flight hours of the airplane in 1983 (147.4) are to be included in the denominator of the business-use ratio for determining allowable 97 T.C. 670">*694 depreciation for 1983. The hours of business use to be included in the numerator of the ratio include Intel flight hours (46.5) and the charter flight hours (7.6). Therefore, we hold that the percentage of business use of the airplane was 36.7 percent (54.1/147.4) in 1983. Petitioners may deduct this portion of depreciation and expenses to the extent it exceeds the reimbursable portion of the expense.

Finally, we must decide whether petitioners are entitled to 1991 U.S. Tax Ct. LEXIS 108">*152 an investment tax credit with respect to petitioner's use of the airplane. Section 38 allows a tax credit for investments in section 38 property. Section 38 property is generally any tangible personal property for which depreciation is allowable under sections 167 or 168. Sec. 48(a). The airplane satisfies the definition of section 38 property and, therefore, qualifies for the credit. However, the regulations provide that the property is eligible for the credit only to the extent that depreciation deductions are allowed for the year. Sec. 1.48-1(b)(2), Income Tax Regs. Thus, if property is used 80 percent of the time in a trade or business, only 80 percent of the basis qualifies as section 38 property. Therefore, petitioners are entitled to the investment tax credit for the airplane in the same proportion as the allowable depreciation determined above.

Decision will be entered under Rule 155.

Reviewed by the Court.

APPENDIX

1. The flight time for delivery of the airplane from Wichita, Kansas to San Jose, California on April 27-28, 1983, was 8.4 hours.

2. The dates and flight times of the airplane in 1983 for ACM crew training are as follows:

1991 U.S. Tax Ct. LEXIS 108">*153 97 T.C. 670">*695 3. The dates and flight times of the airplane in 1983 for maintenance are as follows:

4. The dates, destinations, and flight times of the airplane in 1983 for petitioner's pilot-training flights are as follows:

5. The dates, destinations, and flight times of the airplane in 1983 for the ACM charter flights are as follows:

The majority concluded that petitioner's use of his own airplane and his payment of those expenses did not constitute the voluntary assumption of Intel's obligations. The majority based this conclusion on its finding that Intel expected petitioner, as an officer, to incur and pay travel expenses in excess of the amounts reimbursable under Intel's written reimbursement policy. The majority failed to find, however, that Intel required or expected its officers to use their own airplanes for business travel. In my opinion, such a finding was necessary in order for the majority to reach its conclusion.

Intel's written reimbursement policy, upon which the majority relied, consisted of a letter, dated August 4, 1980 (Intel's reimbursement policy), from Roger Borovoy, who was the general counsel, vice president, and secretary of Intel, to Andrew Grove (Dr. Grove), Intel's president, which stated:

RE: Intel Miscellaneous Expense Reimbursement Policy for Intel Officers

It is Intel's policy not to reimburse officers for certain kinds of expenses. Even1991 U.S. Tax Ct. LEXIS 108">*164 though we recognize that the officer incurs these expenses for the benefit of Intel, we consider either the amount too small or the type of expense to be inappropriate for reimbursement considering the salary and other remuneration an Intel officer receives.

Examples of such expenses are purchases of drinks for Intel employees or others at company-related functions or at professional meetings. Whereas we do reimburse mileage for long trips, we discourage officers from 97 T.C. 670">*701 submitting mileage for car trips between Intel facilities in the Bay Area which are dispersed between Santa Cruz, Sunnyvale, Santa Clara, Mountain View and Livermore.

We also discourage officers from submitting expense reports for business entertaining at home, and for miscellaneous business lunches with Intel employees (even though the purpose of the lunch was entirely to discuss Intel business). Similarly, occasional gifts to secretaries and other employees, while essential for harmony in the work environment, are not reimbursed by the company.

While we feel it is beneficial to our officers to fly first class in order to get more work done on the plane, we have a policy of not reimbursing the additional 1991 U.S. Tax Ct. LEXIS 108">*165 costs for such travel.

In my opinion, Intel's reimbursement policy is insufficient to support a finding that Intel required or expected its officers to use their own airplanes for business travel, for the following reasons.

First, Intel's reimbursement policy did not expressly address Intel's requirements or expectations regarding its officers' use of their own airplanes. Rather, such policy stated only that flying first class was beneficial in that it permitted Intel's officers to get more work done on the airplane.

Second, the stated rationale for not reimbursing certain expenses was that Intel considered such expenses too small or inappropriate for reimbursement, considering the amount of remuneration received by its officers. Listed examples of such expenses were drinks at Intel-related functions and at professional meetings, local car trips, business entertaining at home, lunches with Intel employees, secretarial gifts, and the additional cost of first class travel. The listed examples involved minimal expenses. Petitioner's expense of using his own airplane was not minimal.

Third, Dr. Grove testified that Intel did not expect its officers to use private airplanes1991 U.S. Tax Ct. LEXIS 108">*166 for business travel. In response to the Court's inquiry as to what would happen if Intel demanded that an employee use a private airplane and the employee could not afford one, Dr. Grove answered that Intel would expect the employee either to fly on a commercial airplane and take longer to travel or to forgo taking that particular trip, as follows:

97 T.C. 670">*702 THE COURT: If the corporation wanted -- was going to demand someone to travel and utilize their time in the best interests of the company, and that corporate demand would have required a private plane, would the corporation agree to reimburse the individual for the private plane?

THE WITNESS: Someone other than Dr. Noyce, an ordinary person?

THE COURT: Your general policy?

THE WITNESS: No, well, the policy was pretty well set as I testified. In many of these instances, it wasn't that you couldn't get from here to there. It was just that you couldn't get from here to there in a particular time, and, therefore, Dr. Noyce would have had to take an extra day.

THE COURT: Well, if it was in the interest of the -- of Intel to conserve the employee's time, and the employee said, "I just, you know, I want reimbursement for it1991 U.S. Tax Ct. LEXIS 108">*167 if -- you know, because otherwise you're gonna lose money," what would the corporation policy be then?

THE WITNESS: I think the policy would be still the same. The consequences of starting on the road toward reimbursing people for these things would be that we would have to make judgments on top of judgments and exceptions on top of exceptions, and it's not a comfortable prospect. So, if somebody can afford to pay the extra and make himself more efficient and is willing to handle it that way, he'll do it that way; if not, not.

THE COURT: Well, I guess that's the question I am trying to elicit from -- or the answer I am trying to elicit. You said if the employee can afford to do it. If the employee can't afford to do it because the expenses that the corporation would be requiring of the employee would exceed his salary --

THE WITNESS: Then we won't do it.

THE COURT: Then you would expect the employee to lose money?

THE WITNESS: No.

THE COURT: Oh, then you would reimburse him?

THE WITNESS: No, no, he will take two days.

THE COURT: Oh, then he'll take two days. That would be the corporate desire then.

THE WITNESS: Or would not go on that particular1991 U.S. Tax Ct. LEXIS 108">*168 trip (emphases added).

97 T.C. 670">*703 While it is clear that Intel did not object to petitioner's using his private airplane while traveling on corporate business, the record does not support a finding that Intel required or expected its officers to use their own airplanes for business travel. Thus, I would conclude that petitioner's expenses in using his own airplane were personal.

Before closing, I feel compelled to respond to certain comments made by Judge Halpern in his concurrence. Judge Halpern states that Intel's failure to require or expect petitioner to use his own airplane for business travel was indicative, but not determinative, of whether petitioner's expenses were deductible. In support thereof, Judge Halpern notes that an employee may voluntarily incur deductible expenses in attending a convention or meeting, so long as he is benefiting or advancing the interests of his trade or business by such attendance. Sec. 1.162-2(d), Income Tax Regs.

I recognize that an employee may deduct an ordinary and necessary expense incurred in connection with his trade or business of earning a salary provided that the expense had "a direct bearing on the amount of his compensation or his1991 U.S. Tax Ct. LEXIS 108">*169 chances for advancement". Walliser v. Commissioner, 72 T.C. 433">72 T.C. 433, 72 T.C. 433">437 (1979). In Westerman v. Commissioner, 55 T.C. 478">55 T.C. 478 (1970), we held that the taxpayer's expenses of using his private airplane for business travel were not deductible because such expenses were voluntarily incurred and the airplane was not used by the taxpayer in the hope of receiving additional reimbursement:

As we have noted above, there is no evidence in this case to suggest that petitioner acted other than voluntarily, or that he acted in the hope of receiving any more reimbursement than that which he actually received. Moreover, the mere fact that the company may have benefited from the expenditures incurred by petitioner does not strengthen his position since it is a well-established rule that, in absence of a binding obligation, expenses incurred by one taxpayer for the benefit of another may not be deducted by the former. [Westerman v. Commissioner, 55 T.C. 478">55 T.C. 482. Citations omitted.]

1991 U.S. Tax Ct. LEXIS 108">*170 97 T.C. 670">*704 In conclusion, I would hold that petitioner is not entitled to the claimed deduction for airplane expenses and depreciation under sections 162 and 167, respectively.

PARR, J., dissenting: In addition to the reasons set forth in the dissent of Judge Jacobs, with which I agree, I would also find that use of petitioner's private plane "did not arise directly out of the exigencies of the business of the corporation." Noland v. Commissioner, 269 F.2d 108">269 F.2d 108, 269 F.2d 108">113 (4th Cir. 1959), affg. a Memorandum Opinion of this Court.

PARKER, J., agrees with this dissent.