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Petitioners started the living trust activity in 1990. It is at
least as likely that they bought and paid for the brochures in
1990 as in 1991. Petitioners used the cash basis of accounting,
and a deduction is only allowed in the taxable year in which the
expense was paid. Sec. 461(a). Petitioners have not shown that
they paid for the brochures in 1991 and thus may not deduct the
$156.97 on their 1991 tax return.
2. Whether Petitioners May Deduct Automobile Expenses
To deduct automobile expenses, a taxpayer must show the
amount, date and business purpose of each expense, the amount of
miles traveled, and total automobile use for the taxable period.
Sec. 280F(e); sec. 1.274-5T(b)(6), Temporary Income Tax Regs., 50
Fed. Reg. 46016 (Nov. 6, 1985). The taxpayer must have adequate
records or other evidence to corroborate his or her statements.
Sec. 1.274-5(c)(1), Income Tax Regs. A taxpayer must maintain an
account book, diary, statement of expense, or similar record and
documentary evidence which, in combination and establish each
element of an expense. Sec. 1.274-5(c)(2)(i), Income Tax Regs.
If a taxpayer does not have adequate records, the taxpayer must
establish each element of the expense by his or her own
statement, written or oral, and by other corroborative evidence
sufficient to establish each element. Sec. 1.274-5(c)(3)(i),
(ii), Income Tax Regs.
Petitioners deducted automobile expenses for 1991 for three
activities as follows:
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Last modified: May 25, 2011