-7- In order to substantiate a deduction by means of adequate records, a taxpayer must maintain a diary, a log, or a similar record, and documentary evidence that, in combination, are sufficient to establish each element of each expenditure or use. Sec. 1.274-5T(c)(2)(i), Temporary Income Tax Regs., 50 Fed. Reg. 46017 (Nov. 6, 1985). To be adequate, a record must generally be written. Each element of an expenditure or use that must be substantiated should be recorded at or near the time of that expenditure or use. Sec. 1.274-5T(c)(2)(ii)(A), Temporary Income Tax Regs., 50 Fed. Reg. 46017 (Nov. 6, 1985). Thus, under section 274(d) no deduction may be allowed for expenses incurred for use of a passenger automobile on the basis of any approximation or the unsupported testimony of the taxpayer. Golden v. Commissioner, T.C. Memo. 1993-602. The prerequisites to deductibility of vehicle expenses incurred by an employee, therefore, are, first, that the expenses be nonreimbursable outlays, and, second, that the expenses be substantiated in accordance with the requirements of section 274. For the 1991 taxable year, Mr. Bradley claimed a deduction for actual vehicle expenses of $9,143. He could have been reimbursed by his employer in the amount of $2,691.36 (9,968 business miles multiplied by 27 cents per mile). Thus, any vehicle expenses in excess of $2,691.36 are nonreimbursable and potentially deductible. However, Mr. Bradley substantiated the amount of his vehicle expenses by presenting invoices and canceled checks only in the amount of $3,567.74. Assuming,Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
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