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the 1980 tax return he claimed deductions for Schedule F farm
expenses of $249,204 for the same farm, all of which were
disallowed by respondent.
The journals and chart of accounts of Caspian Farm Systems
are the only records in evidence for the 1979 disallowed net farm
loss and the 1980 disallowed expenses adjusting the 1980 reported
farm loss to positive farm income. In 1979 and 1980 Caspian Farm
Systems was a corporation and filed consolidated tax returns with
CDC. There are no invoices, canceled checks, or other records in
evidence of payment for the amounts claimed on petitioner's
Schedule F as losses and deductions for 1979 and 1980. There is
also no evidence of record that any portion of the disallowed
expenses paid by petitioner in 1979 and 1980 for the Madison
County Farm were ordinary and necessary expenses currently
deductible. Petitioner presented no evidence that he, as a cash
basis taxpayer, paid any amount during the years 1979 and 1980
for the claimed Madison County deductions. Therefore, in
computing 1979 taxable income, petitioner is not entitled to a
farm loss of $128,458 and, in computing 1980 taxable income, he
is not entitled to deduct unsubstantiated farm expenses of
$249,204.
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