- 10 -
Finally, we have no evidence of petitioners' cost basis in the
Ocean City property, and except for Mr. Kerrigan's self-serving
testimony at trial, there is no evidence that Mrs. Kerrigan used
the Ocean City condominium as an office. We therefore sustain
respondent's determination.
Freight Expenses
Mrs. Kerrigan claimed a Schedule C deduction for freight
expenses in the amount of $122. Respondent allowed $83. Since
petitioners have not presented any evidence to substantiate this
deduction, we sustain respondent's determination.
Repair Expenses
Respondent disallowed Mr. Kerrigan's $3,610.55 Schedule C
deduction for repairs in its entirety. Petitioners offered
nothing to substantiate most of this amount, nor do they explain
how it was computed. Petitioners argue on brief that they have
presented sufficient documentary evidence to substantiate a
deduction in the amount of $329. They offered a handwritten log
prepared by Mr. Kerrigan as a record of his business, travel, and
entertainment expenses for 1985. However, they produced no
invoices or canceled checks. Under these circumstances, we hold
that Mr. Kerrigan has not adequately substantiated the business
purpose of this Schedule C deduction. See sec. 1.162-1(a),
Income Tax Regs.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011