hospital that was closer to her office. For the 3 months during 1986 when Mrs. Hilliard maintained two offices, she would drive 1 day each week from Oakland to San Ramon and then home. Petitioners claimed 85 percent business use of Mrs. Hilliard's automobile, and respondent, in the notice of deficiency, determined 17 percent business use. At trial, Mrs. Hilliard estimated about 50 to 60 percent business use. Section 274(d)(4) (which is effective for taxable years beginning on or after January 1, 1986, the beginning of the first year in issue) requires substantiation by adequate records or evidence, in addition to mere testimony, to be entitled to travel expenses. Petitioners offered no records or other evidence of the business use of Mrs. Hilliard's automobile other than her testimony, which was expressed in terms of an estimate. Petitioners have not met the section 274(d) requirements necessary to show entitlement to transportation deductions in excess of the amounts allowed by respondent. Rule 142(a).7 VI. Mortgage Interest Petitioners, for 1988, claimed $85,151 of mortgage interest. Respondent's agent was shown substantiation for $83,216 of mortgage interest. Petitioners, for 1987, claimed $33,629 of mortgage interest, and respondent determined that all 7 Our determination of Mrs. Hilliard's automobile use results in an adjustment to her self-employment income, which in turn increases her self-employment tax liability. This adjustment is automatic (purely mathematical) and requires no further discussion.Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
Last modified: May 25, 2011