Dona Elizabeth Conway - Page 12

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          Subsidiaries v. Commissioner, 699 F.2d 450, 453 (8th Cir. 1983),            
          affg. 78 T.C. 458 (1982).  Under certain circumstances, we may              
          estimate costs and allowable deductions.  Cohan v. Commissioner,            
          39 F.2d 540, 543-544 (2d Cir. 1930).  The estimates, however,               
          must have a reasonable evidentiary basis.  Vanicek v.                       
          Commissioner, 85 T.C. 731, 742-743 (1985).                                  
               Respondent argues that petitioner has not adequately                   
          substantiated any costs and capital improvements to her home in             
          excess of the $221,633 that respondent has agreed to.  The                  
          claimed costs and improvements still in dispute relate to the               
          years 1971 through 1986, for which petitioner has minimal or no             
          documentation.  Respondent argues that petitioner's testimony as            
          to the costs of the claimed improvements is self-serving and                
               Petitioner claims that the evidence relating to the                    
          improvements allegedly made during 1971 through 1986 is adequate            
          for the Court to estimate the costs thereof and that she should             
          be entitled to increase the tax basis in her home by an                     
          additional $156,050 beyond those items allowed by respondent, for           
          a total tax basis in the home of $377,683.                                  
               Credible evidence adequately establishes that, during the              
          years 1971 through 1986, petitioner and her husband made                    
          extensive capital improvements to the home.  In addition to the             

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