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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
deductions.
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