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b. The Food Supplement Business
Petitioners lost the log which listed their automobile use
for the food supplement business from May to December 1991. In
lieu of a mileage log, petitioners introduced numerous receipts
to support their claim that they participated in that business
from May to December 1991.
Petitioners offered a summary of income and expenses of
their food supplement business. The list was marked with the
letters "KM". It listed 17 expenses, such as $7 in bridge tolls,
$6.52 for postage, $10.81 for failure to collect taxes on sales
made, and 50 cents for parking. Mr. Frank testified that he
spent these amounts for his food supplement business. We hold
that petitioners may deduct $24.83 for these expenses.
c. The Nebraska Street Property
Petitioners offered no evidence relating to automobile
expenses for the Nebraska Street property. They have not met
their burden of proof for this expense. Rule 142(a).
3. Whether Petitioners May Deduct Expenses Related to
Their Purchase of the Springs Road Property
Amounts paid in connection with the acquisition of property
are capital expenditures if they increase the value or
substantially prolong the useful life of the property. Sec.
1.263(a)-1(b), Income Tax Regs. Amounts paid or incurred for
repairs and maintenance are not capital expenditures.
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