National Industrial Investors, Inc. - Page 30

                                               - 30 -                                                  

            1990 mileage of the Cougar, we cannot allocate the expenses                                
            between business and personal use.  Petitioner's repair                                    
            deductions are, therefore, denied.                                                         
                  Section 274(d) also applies to travel expenses.  Petitioner                          
            has failed to prove its business purpose for the $48.77 travel                             
            expenses incurred in 1989.  Section 274(d) requires                                        
            substantiation of the business purpose for each item.  Sec.                                
            274(d)(2).  Petitioner submitted a receipt from the Madonna Inn                            
            in San Luis Obispo, California, for the night of December 27,                              
            1989, and Byrne's mileage logs indicate that he drove to San Luis                          
            Obispo on that date, but for that particular trip the logs do not                          
            indicate a business purpose.                                                               
                  As for the remainder of petitioner's expenses--fees of                               
            Charles, management fees of Byrne, rents, other insurance,                                 
            telephone, subscriptions, other office expenses, other                                     
            professional services, and other travel expenses--totaling                                 
            $5,978.96 and $9,463.30 for 1989 and 1990, respectively, we find                           
            that petitioner has proven its business purpose.  We therefore                             
            allow them to the extent substantiated; i.e., $3,151.91 and                                
            $6,963.05 for 1989 and 1990, respectively.  The unsubstantiated                            
            expenses are supported only by petitioner's books.  We have                                
            already found them unreliable, and we therefore deny those                                 

Page:  Previous  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  31  32  Next

Last modified: May 25, 2011