6
F.2d 540 (2d Cir. 1930). However, the Court may bear heavily
against the taxpayer "whose inexactitude is of his own making."
Id. at 544. An exception to the Cohan rule is section 274(d),
which requires strict substantiation of certain expenses,
including those paid or incurred with respect to certain listed
property. Sec. 274(d). Listed property includes automobiles.
Sec. 280F(d)(4). Section 274(d) requires substantiation of these
expenses either "by adequate records or by sufficient evidence
corroborating the taxpayer's own statement". Sec. 274(d).
Rental Expenses
Section 469 limits the allowance of passive activity losses.
Section 469(a) provides that for an individual, no passive
activity loss will be allowed for a taxable year. Section
469(c)(2) defines the term "passive activity" to include any
rental activity. A "passive activity loss" is the amount by
which losses from passive activities exceed income from such
activities. Sec. 469(d). The disallowance set forth in section
469(a) shall not apply to the portion, not to exceed $25,000, of
the passive activity loss which is attributable to all rental
real estate activities with respect to which an individual
taxpayer actively participated in the taxable year. Sec. 469(i).
Petitioner argues that section 469 does not apply to his
rental activity. Petitioner contends that he is entitled to
claim a loss from rental real estate in the amount of $27,817.
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