Gerald L. and Joy M. Zeidler - Page 17

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          expended for meals and lodging* * *) while away from home in the            
          pursuit of a trade or business".  Section 274(d) provides further           
          that, to substantiate such expenses, the taxpayer must maintain             
          adequate records that include maintaining an "account book,                 
          diary, log, statement of expense, trip sheet, or similar record             
          * * * and documentary evidence * * * which, in combination, are             
          sufficient to establish each element of an expenditure".  Sec.              
          1.274-5(c)(2)(i), Income Tax Regs.6  The substantiation                     
          requirements of section 274(d) apply to automobile expenses by              
          virtue of section 280F(d)(4) and to expenses connected with other           
          classes of property referred to as "listed property" and defined            
          in section 280F(d)(4).  Section 280F(d)(4)(A)(i) and (ii)                   
          includes any passenger automobile or any other property used as a           
          means of transportation.  Petitioners did not maintain the                  
          records required by section 274(d) to substantiate their meals              
          and automobile expenses.  Respondent, therefore, is sustained on            
          this issue.                                                                 
               As noted earlier, petitioners owned two residential rental             
          properties as to which they reported their income and expenses on           
          Schedule E of their returns.  One of the properties was a single            
          family home located at Sister Bay, Wisconsin, a popular resort              
          and vacation area located 90 miles north of Milwaukee, Wisconsin.           

               Under sec. 274(d)(1), the substantiation requirements for              
          traveling expenses are applicable to expenses under sec. 162, as            
          well as expenses under sec. 212.                                            

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