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incur along the way", but that he was expected to pay some of his
own expenses in anticipation of further contracts. The parties
agree that petitioner incurred expenses of $18,869 for which he
was reimbursed, and that the $18,869 is included in the agreed
upon $46,229 which petitioner received from Con Tex, Inc., in
1987. Thus, the net income which petitioner received from Con
Tex, Inc., totaled $27,360. Neither the $46,229, the $18,869,
nor petitioner's relationship with Con Tex, Inc., is disclosed on
petitioners' 1987 return.
Petitioners claim that they are entitled to deduct as
ordinary and necessary business expenses amounts in excess of the
$18,869 reimbursement falls short in at least two respects: (1)
Petitioners have failed to show that any such excess expenditures
were ordinary and necessary expenses incurred in a trade or
business, and (2) they have failed to substantiate the amount of
any such excess. Petitioner's testimony that he was expected to
pay some of his own expenses over and above those for which he
was reimbursed is vague and self-serving and wholly unsupported
by any other credible evidence.
Section 162(a) permits a deduction for the ordinary and
necessary expenses paid or incurred during the tax year in
carrying on a trade or business. Such expenses must be ordinary
and necessary in the conduct of the taxpayer's business and
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