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fees generally are deductible as a Schedule A expense. Sec.
212(3); sec. 1.212-1(1), Income Tax Regs.; sec. 1.67-
1T(a)(1)(iii), (b), Temporary Income Tax Regs., 53 Fed. Reg. 9875
(Mar. 28, 1988). Petitioners have not provided evidence that
would enable us to find or estimate any portion of the fees that
is allocable to petitioner husband's business.
We conclude that petitioners failed to prove that they may
deduct advertising, rent, office expenses, utilities and
telephone, commissions, supplies, licenses and fees, dues, rental
maintenance, and insurance expenses in excess of the amounts
allowed by respondent. Petitioners' evidence that they could
deduct these expenses consisted of the canceled checks and
petitioner husband's testimony. Petitioner husband did not
explain the nature or necessity of some of the advertising and
rental property repairs expenses, or the business purpose for
these expenses. He did not show that some insurance expenses had
a business, rather than a personal, purpose. Many of the
disputed checks were payable to cash or to payees related to
petitioners. He did not show whether some of the license fees,
rental maintenance, and insurance expenses related to Schedule C
or Schedule E activities. Petitioners also failed to meet the
section 274 substantiation requirements for his club dues for
Club Terrasini and the Italian American Cultural Society, and for
promotional expenses for watches bearing the Soldi logo. Except
as stated in this opinion, petitioners have failed to convince us
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