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P deeded their entire title and interest in improved real property to an irrevocable trust for the benefit of their four children. P and a friend, Gross, were co-trustees. Although executed and delivered in 1971, the deed was not recorded until 1973. P then rented the property from the trust under an oral lease. P paid $1,000 per month and used it to conduct his medical practice. Gross regularly checked to see if the rent, which D concedes was reasonable, had been paid. D disallowed the deduction for rent. P petitioned, and the Tax Court agreed with P. It held that P's rental payments in 1973 were ordinary and necessary business expenses under Internal Revenue Code (IRC) § 162(a). D appealed.

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