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A taxpayer may deduct ordinary and necessary expenses paid
or incurred during the taxable year in carrying on a trade or
business. Sec. 162(a). Deductions are a matter of legislative
grace, and the taxpayer bears the burden of proving that she is
entitled to claimed deductions. Rule 142(a); New Colonial Ice
Co. v. Helvering, 292 U.S. 435, 440 (1934); Welch v. Helvering,
supra at 115. This includes the burden of substantiating the
amount and purpose of the item claimed. Sec. 6001; Hradesky v.
Commissioner, 65 T.C. 87, 90 (1975), affd. per curiam 540 F.2d
821 (5th Cir. 1976); sec. 1.6001-1(a), Income Tax Regs. However,
if certain claimed deductions are not adequately substantiated,
we are permitted to estimate them, provided we are convinced from
the record that the taxpayer has incurred such expenses and we
have a basis upon which to make an estimate. Cohan v. Commis-
sioner, 39 F.2d 540 (2d Cir. 1930); Vanicek v. Commissioner, 85
T.C. 731, 743 (1985).
A. Bank Service Charges
Respondent determined that petitioner was not entitled to a
deduction for bank service charges. Petitioner asserts that such
a deduction is allowable.
During 1985, petitioner had three bank accounts in her name:
A Norbank account, a Lafayette County Bank (Lafayette Bank)
account, and a Blue Springs Bank account. Petitioner's account
with Norbank was separate from Orad's Norbank account.
Petitioner had $105 in bank service charges arising from her
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