-14-
1976); sec. 1.6001-1(a), Income Tax Regs. If claimed deductions
are not adequately substantiated, we may estimate them, provided we
are convinced that the taxpayer has incurred such expenses and we
have a basis upon which to make an estimate. Cohan v.
Commissioner, 39 F.2d 540 (2d Cir. 1930); Vanicek v. Commissioner,
85 T.C. 731, 743 (1985).
Pursuant to section 162(a), a taxpayer may deduct all
ordinary and necessary expenses paid or incurred during the taxable
year in carrying on a trade or business. In general, an expense is
ordinary if it is considered “normal, usual, or customary” in the
context of the particular business out of which it arose. Deputy
v. duPont, 308 U.S. 488, 495-496 (1940). The term “ordinary” is
also used to distinguish currently deductible items from capital
expenditures. Commissioner v. Tellier, 383 U.S. 687, 689-690
(1966). An expense is necessary if it is appropriate and helpful
to the operation of the taxpayer’s trade or business. Carbine v.
Commissioner, 83 T.C. 356, 363 (1984), affd. 777 F.2d 662 (11th
Cir. 1985); Heineman v. Commissioner, 82 T.C. 538, 543 (1984).
Only the portion of an expense that is reasonable in amount is
deductible under section 162. United States v. Haskel Engineering
& Supply Co., 380 F.2d 786, 788-789 (9th Cir. 1967).
Pursuant to section 262(a), personal, living, or family
expenses may not be deducted, except as otherwise expressly
provided in the Code. Furthermore, no deduction is allowed if an
employee is reimbursed for his expenses and does not include such
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