- 21 -
section 162(a), not section 280A.6 See Green v. Commissioner,
T.C. Memo. 1989-599.
As a general rule, if the record provides sufficient
evidence that the taxpayer has incurred a deductible expense, but
the taxpayer is unable to adequately substantiate the amount of
the deduction to which he or she is otherwise entitled, the Court
may estimate the amount of such expense and allow the deduction
to that extent. Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d
Cir. 1930). Based upon the record, we estimate that of the
$2,141 disallowed by respondent for 1988, $200 consisted of
deductible telephone expenses, and of the $898 disallowed by
respondent for 1990, $75 consisted of deductible telephone
expenses.
Accordingly, we sustain respondent's determination with
respect to the telephone expenses only in part.
Insurance Expenses for 1990
Petitioners claimed a deduction for insurance in the amount
of $5,337 for the taxable year 1990. Respondent disallowed
$4,355 of the claimed deduction. At trial, petitioners explained
that the insurance deduction includes expenses for automobile
insurance, personal liability insurance on the downtown office,
6 We note that sec. 262(b), effective for 1989 and later
years, disallows a deduction for "basic local telephone service
with respect to the first telephone line" to any residence of the
taxpayer, regardless of any business use of the telephone. This
section, however, does not apply in this case since petitioners
have not claimed local telephone service expenses.
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