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Deductions are a matter of legislative grace, and
petitioners bear the burden of proving that they are entitled to
the deductions claimed. Rule 142(a); INDOPCO, Inc. v.
Commissioner, 503 U.S. 79, 84 (1992); New Colonial Ice Co. v.
Helvering, 292 U.S. 435 (1934). Taxpayers are required to
maintain records that are sufficient to enable the Commissioner
to determine their correct tax liability. See sec. 6001;
Meneguzzo v. Commissioner, 43 T.C. 824, 831-832 (1965); sec.
1.6001-1(a), Income Tax Regs. Moreover, a taxpayer who claims a
deduction bears the burden of substantiating the amount and
purpose of the item claimed. Hradesky v. Commissioner, 65 T.C.
87, 90 (1975), affd. per curiam 540 F.2d 821 (5th Cir. 1976);
sec. 1.6001-1(a), Income Tax Regs.
In the instant case, petitioners contend that they are
entitled to a bad debt deduction in the amount of $28,080 for a
payment petitioner made as guarantor for loans made to D.B.
Metalworks. Petitioners argue that the payment was a discharge
of petitioner's obligation as a guarantor and is, therefore,
deductible as a business bad debt pursuant to section 1.166-9(a),
Income Tax Regs. Respondent contends that petitioners have not
established that petitioner's guaranty was proximately related to
his trade or business.
We conclude that petitioners have not carried their burden
of proving that they are entitled to a bad debt deduction for the
guaranty of D.B. Metalworks' indebtedness. As stated supra, in
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