- 8 -
133 (10th Cir. 1958), affg. 27 T.C. 413 (1956); Cohan v.
Commissioner, 39 F.2d 540 (2d Cir. 1930). The estimate, however,
must have some reasonable evidentiary basis. Vanicek v.
Commissioner, 85 T.C. 731, 743 (1985).
A. Taxes
Respondent determined that petitioner is entitled to deduct
taxes of $5,091 and $422 for 1979 and 1980, respectively.
Petitioner deducted taxes of $17,000 for 1979 and $17,300 for
1980.5
Section 164(a) generally permits taxpayers to deduct State
and local income taxes, general sales taxes, and taxes on the
sale of gasoline paid or accrued within the taxable year. Sec.
1.164-1(a), Income Tax Regs.
Petitioner estimated his deduction for general sales tax, on
the basis of a sales tax of 6 percent multiplied by the various
purchases he made for the boat, the car, and other miscellaneous
expenditures he incurred during the taxable years in issue.
Petitioner's explanation, although logical, is implausible. He
deducted $10,000 in general sales tax for each year. Assuming a
sales tax of 6 percent, petitioner would have had to purchase
$166,666 worth of items subject to sales tax in 1979 and 1980 to
have incurred $10,000 in general sales tax for each of those
5 The $17,000 in taxes that petitioner deducted in 1979
includes $6,000 for State and local income taxes, $1,000 for
State and local gasoline tax, and $10,000 for general sales tax.
The $17,300 in taxes that petitioner deducted in 1980
includes $6,000 for State and local income taxes, $1,300 for
personal property tax, and $10,000 for general sales tax.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011