Albert C. Johnson - Page 12

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          amount and purpose of the item claimed.  Sec. 6001; 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.  If claimed             
          deductions are not adequately substantiated, we are permitted to            
          estimate them, provided we are convinced from the record that the           
          taxpayer has incurred such expenses and we have a basis upon which          
          to make an estimate.  Cohan v. Commissioner, 39 F.2d 540 (2d Cir.           
          1930); Vanicek v. Commissioner, 85 T.C. 731, 743 (1985).                    
               Pursuant to section 162(a), a taxpayer may deduct all ordinary         
          and necessary expenses paid or incurred during the taxable year in          
          carrying on a trade or business.  In general, an expense is                 
          ordinary if it is considered “normal, usual, or customary” in the           
          context of the particular business out of which it arose.  Deputy           
          v. duPont, 308 U.S. 488, 495-496 (1940).  An expense is necessary           
          if it is appropriate and helpful to the operation of the taxpayer’s         
          trade or business.  Carbine v. Commissioner, 83 T.C. 356, 363               
          (1984), affd. 777 F.2d 662 (11th Cir. 1985); Heineman v.                    
          Commissioner, 82 T.C. 538, 543 (1984).  Only the portion of an              
          expense that is reasonable in amount is deductible under section            
          162.  United States v. Haskel Engg. & Supply Co., 380 F.2d 786,             
          788-789 (9th Cir. 1967). Pursuant to section 262(a), no portion of          
          any expenditure attributable to personal, living, or family                 
          expenses may be deducted, except as otherwise expressly provided in         
          the Code.                                                                   





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