- 6 - maintained a separate bank account for the real estate activity; however, most of the checks entered into evidence that were drawn on the account were made payable to "cash". Petitioner described the nature of his real estate activity for years prior to 1991 but provided no information concerning what he was doing in 1991. OPINION Respondent disallowed the entire moving expense deduction based upon lack of substantiation. Respondent disallowed all of the deductions claimed on the Schedule C upon the ground that petitioner's real estate activity did not constitute a trade or business within the meaning of section 162(a). Petitioners claim that they have satisfied all of the provisions of section 217, and with the exception of certain PSI records, rely exclusively on petitioner's testimony to support the amount of the deduction claimed. Petitioner also claims that he was engaged in some real estate business during 1991 and relies primarily upon his history of such activity in the years 1985 through 1988. Respondent's determinations, having been made in a notice of deficiency, are presumed correct, and petitioners bear the burden of proving such determinations to be erroneous. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Furthermore, deductions are a matter of legislative grace, and the taxpayer bears the burden of proving that he is entitled to any deduction claimed. Rule 142(a); INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992); New Colonial Ice Co. v. Helvering, 292 U.S. 435,Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011