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(life insurance agent commissions); Williams v. Commissioner, 64
T.C. 1085 (1975) (real estate agent commissions); Bailey v.
Commissioner, 41 T.C. 663 (1964) (life insurance agent
commissions); Kobernat v. Commissioner, T.C. Memo. 1972-132
(stockbroker commissions).
Costs incurred in the acquisition and disposition of a
capital asset are nondeductible capital expenditures. Woodward
v. Commissioner, 397 U.S. 572, 575 (1970). Thus, for a taxpayer
who is not a dealer, brokerage fees incurred to purchase
securities must be added to the cost basis of the securities, and
brokerage fees incurred to sell securities must be offset against
the sale price. Sec. 1.263(a)-2(e), Income Tax Regs.
3. Employee Business Expenses
Respondent disallowed petitioners' deductions for
unreimbursed entertainment expenses on the grounds, inter alia,
that the deductions were not substantiated in accordance with
section 274(d). Mr. Kelly argues that he adequately
substantiated his expenses for at least 1 of the years at issue
and that the Court should use its discretion in estimating the
amount of the deductible expenses for the other years. We agree
with respondent that petitioners are not entitled to any of the
claimed deductions.
Section 274(d) was intended to preclude discretionary
estimation of certain business expenses by the courts pursuant to
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