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Harrigan Lumber Co. v. Commissioner, 88 T.C. 1562, 1565 (1987),
affd. without published opinion 851 F.2d 362 (11th Cir. 1988);
see also sec. 1.274-2(e)(2), Income Tax Regs.
Accordingly, we hold that petitioner cannot deduct any
expenses incurred in connection with the Blue Chip.8
C. Travel and Entertainment
Respondent determined that petitioner is entitled to deduct
$1,136 in travel and entertainment (T&E) expenses for 1979 and
$1,950 for 1980. Petitioner deducted T&E expenses of $23,000 for
1979 and $30,000 for 1980. Petitioner asserts that he provided
respondent with receipts to verify that he incurred such
expenses; therefore, he argues that his T&E deductions for the
taxable years in issue are fully allowable.
A taxpayer is required under section 274(d) to substantiate
entertainment expenses by adequate records to corroborate his or
her own testimony as to: (1) The amount of the expense, (2) the
time and place the expense was incurred, (3) the business purpose
of the expense, and (4) the business relationship to the taxpayer
of each expense incurred. Sec. 1.274-5(b)(1), Income Tax Regs.
For travel expenses incurred while away from home, a taxpayer
must maintain adequate records reflecting: (1) The amount of
each separate expenditure of transportation and lodging, (2) the
8 At trial and on brief, petitioner asserts that he is
entitled to a depreciation deduction for the Blue Chip not
previously claimed on his 1979 and 1980 returns. Given our
holding, however, that petitioner's boat is an entertainment
facility within the meaning of sec. 274(a)(1)(B), a depreciation
deduction with respect to the boat is disallowed.
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