- 22 -
v. Helvering, 292 U.S. 435, 440 (1934). Section 6001 requires
taxpayers to maintain adequate records from which their tax
liability may be determined. Petzoldt v. Commissioner, 92 T.C.
661, 686 (1989).
Petitioners offered no evidence or argument concerning the
$10,105 of deductions taken for an undetermined rental activity.
We hold that petitioners have abandoned that portion of the
substantiation issue.
Petitioners have offered nothing other than vague testimony
by Dr. Rao to substantiate expenses other than interest,
equipment lease payments, and depreciation. We hold that these
other expenses are not substantiated. "We know of no rule that
uncontradicted testimony must be accepted by a court finding the
facts, particularly where, as here, the testimony is given by
interested parties." Wood v. Commissioner, 338 F.2d 602, 605
(9th Cir. 1964), affg. 41 T.C. 593 (1964).
Petitioners proved that they bought the medical center
building in 1980 for $120,000. Dr. Rao testified that in the
early 1980's he borrowed $70,000 from Columbia to make
improvements to the medical center and $50,000 from Chase to
purchase equipment. However, no invoices or canceled checks were
offered to substantiate any improvements or equipment purchases.
We do not know exactly what equipment was purchased, how much the
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011