20 substantiating the amount and purpose of the item claimed. Sec. 1.6001-1(a), Income Tax Regs. Petitioners did not have books and records to support their deduction of these expenses. Petitioners have not proven that they paid the expenses or that the expenses were made for a business purpose. Interest expenses make up $108,576 of the $127,985 claimed for 1988 (84 percent) and $96,693 of the $135,824 claimed for 1989 (71 percent), yet petitioners provided no evidence that they had any indebtedness relating to the dirt fill operation. Kane obtained the amounts to report as income and deductions from the dirt fill operation from the trustee's listing of cash receipts and disbursements; however, those records are not in evidence. Petitioners produced no bills or checks to substantiate the claimed expenses. Petitioners offered no credible evidence to substantiate their claimed expenses from the dirt fill operation for 1988 and 1989. Thus, we sustain respondent's disallowance of these expenses. C. Capital Gains From Sales of Stock in Bohannon, S.A. Petitioners claimed that their basis in the Bohannon, S.A. stock they sold in 1988 was $30,000, and $30,000 for the stock they sold in 1989. Respondent disallowed petitioners' claimed bases in their Bohannon, S.A. stock because petitioners did not substantiate these amounts.Page: Previous 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Next
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