So this guy thinks he can deduct the amount he's been spending on dating this girl. As Prof. Honigsberg would ponder, "Good ideaaaaaa?!" Above the Law quips:
TaxProf Blog reports on the findings from the U.S. Tax Court:
Mr. Shih was romantically involved with Ms. Yang, and she moved into his home. There were discussions of a formal engagement, and their relationship was intimate. Mr. Shih testified at the trial and his testimony concerning his romantic relationship with Ms. Yang was evasive. Mr. Shih was called by respondent and testified on direct examination that Ms. Yang had performed services in his business in exchange for the payments made to her during 2005. On cross-examination, however, after admitting that his relationship with Ms. Yang was more than a professional one, Mr. Shih could not recall taking her out on dates or any intimacy in their relationship, even though their relationship existed only a few years ago.
It is obvious that Mr. Shih and Ms. Yang have conflicting interests in the outcome of this controversy and that their positions are diametrically opposed. Mr. Shih structured the payments to Ms. Yang so that they appeared to be wages. He issued a Form W-2, Wage and Tax Statement, and used the notation "salary" or "wages" on some of the checks used for payment. Ms. Yang, however, was forthright in her testimony and answered all questions whether or not they favored her position. On the other hand Mr. Shih professed to remember only those things that supported his position that the payments were income to Ms. Yang. We find his testimony to be evasive and untrue.
The facts show that Mr. Shih made payments totaling $10,500 to Ms. Yang with "detached and disinterested generosity" out of his affection for her at the time of payment. We accordingly hold that the $10,500 in payments made during 2005 was a gift and not reportable as income.
What did Shih expect the court to say? I mean, how many guys do you know that will give a girl $10,500, but can't remember if he had sex with her? In fact, how many people do you know that will give a girl a $10.50 movie ticket, but can't remember if he had sex with her?
There's no accounting for some people in this world!