James E. Copley and Cynthia R. Copley - Page 13

                                         13                                           
          taxpayer bears the burden of proving that he or she is entitled             
          to any deduction claimed.  Rule 142(a); New Colonial Ice Co. v.             
          Helvering, 292 U.S. 435, 440 (1934).  This includes the burden of           
          substantiation.  Hradesky v. Commissioner, 65 T.C. 87, 90 (1975),           
          affd. per curiam 540 F.2d 821 (5th Cir. 1976).                              
               In support of the items remaining in dispute with respect to           
          the California property, petitioner introduced an invoice titled            
          "Trial Balance".  The invoice, dated January 27, 1989, and                  
          created for petitioner by Inland, lists income and expenses                 
          attributable to the California property.  Petitioner testified              
          that several of the items on the invoice are incorrect, and based           
          on the lack of available receipts or other supporting documents,            
          we are unable to determine whether the expenses were actually               
          paid, and, if so, in which year (1988 or 1989).                             
               With respect to the Charleston property, petitioner offered            
          no receipts, travel logs, or other documentation to substantiate            
          the items still in dispute, other than handwritten schedules and            
          lists of expenses prepared for trial.  Despite the fact that                
          petitioners filed amended returns as late as May 1994, 1 month              
          before trial, they were unable to provide any credible evidence             
          to support the deductions claimed.  Furthermore, several of the             
          items in dispute, if in fact purchased, would be in the nature of           
          improvements with an expected life greater than 1 year, and the             
          costs associated therewith must be capitalized and depreciated              
          pursuant to statutorily prescribed limits.  The testimony of                




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011