- 29 -
provide adequate records or corroborate testimony with other
evidence.
Petitioner proved that the business purpose behind Byrne's
use of the Malibu and Cougar automobiles was to find a section
1031 exchange property, and to inspect the Burke Property. Byrne
also recorded in mileage logs the time, place, distance, and
business reason for his drives in the Malibu. The logs
substantiate 10,305 miles in 1989 and 7,523 miles in 1990.
Respondent did not argue that the mileage rates were incorrect.
Petitioner is therefore entitled to deduct 22.5 cents per mile
for 1989 and 26 cents per mile for 1990.
Petitioner sought to deduct the insurance and repair costs
attributable to the Cougar for 1990. Generally, when a taxpayer
deducts the actual cost of operating an automobile, he is
required to allocate that cost between business and personal use,
and to substantiate that allocation. Henry Schwartz Corp. v.
Commissioner, 60 T.C. 728 (1973); sec. 1.274-5T(b)(6)(i),
Temporary Income Tax Regs., 50 Fed. Reg. 46006, 46014 (Nov. 6,
1985). In the past, if the taxpayer provided the Court with a
basis upon which to estimate an allocation, the Court has
estimated it under the Cohan rule. Sapp v. Commissioner, 36 T.C.
852 (1961), affd. 309 F.2d 143 (5th Cir. 1962). Now, however,
section 274(d) prohibits such an estimation. Sec. 1.274-5(a)
Income Tax Regs. Because petitioner has not proven the total
Page: Previous 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 NextLast modified: May 25, 2011