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into evidence copies of receipts for food and gasoline totaling
$232.77 and a copy of an airline ticket in the amount of $318.
Mr. Bradley testified that he incurred the food and gasoline
expenses in an attempt to generate interest in the property by
showing it to a friend from Houston and holding a picnic for
local residents. He testified that the airline ticket was
purchased to meet with a former business partner in Chicago to
discuss developing the land as a low-income housing project.
Since the foregoing expenses are for travel and entertainment
they must, in addition to meeting the requirements of sections
162 or 212, be substantiated in accordance with the requirements
of section 274(d). Since petitioners have not substantiated the
business purpose of the foregoing expenditures with a written
explanation, see sec. 1.274-5T(c)(2)(ii)(B), Temporary Income Tax
Regs., 50 Fed. Reg. 46018 (Nov. 6, 1985), or corroborated Mr.
Bradley's statements with direct or circumstantial evidence of
the time, place, or business purpose of the expenditures, see
sec. 1.274-5T(c)(3)(i), Temporary Income Tax Regs., 50 Fed. Reg.
46020-46021 (Nov. 6, 1985), we find the receipts and Mr.
Bradley's testimony insufficient for purposes of section 274(d)
substantiation and therefore sustain respondent's determination
disallowing the auto and travel expenses.
With respect to the disallowance of a $1,500 management fee
claimed on Schedule E for the Mississippi land, petitioners
offered a copy of a check made out to "DECA Corp." as payee in
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