- 12 -
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
uncorroborated.
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
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011