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may estimate them when we are convinced from the record 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, 742-743
(1985). However, the principle established in Cohan v.
Commissioner, supra, does not apply to deductions for travel, as
such deductions are subject to the specific substantiation
requirements imposed by section 274(d).
Respondent does not dispute that petitioner's "education
business" constituted a trade or business within the meaning of
section 162(a) for 1992, as indicated by the fact that in the
notice of deficiency she has allowed portions of some of the
business expense deductions claimed on the Schedule C.
Furthermore, she now concedes that petitioners are entitled to a
Schedule C rent expense deduction, but only in the amount of
$1,772.35.
I. Cost of Goods Sold
Petitioner's 1992 Schedule C reflected gross receipts in the
amount of $7,271 and cost of goods sold in the amount of $7,030.
Petitioner computed cost of goods sold by including expenditures
allegedly incurred in connection with both the book marketing
activity and educational seminars activity. In the notice of
deficiency, respondent completely disallowed the cost of goods
sold claimed. According to respondent, petitioner has failed to
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