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however, lacks specificity as to the amounts Motomi incurred in
1988 and 1989 in performing business-related activities in her
home on Toraya's behalf, or even as to how Toraya arrived at the
amounts it paid to Motomi in those years. In our view, the
amounts claimed appear excessive for the alleged purpose.
Accordingly, Toraya has failed to prove that these payments to
Motomi were business related and reasonable in amount.
Nonetheless, we are persuaded that Motomi performed some
business-related activities pertaining to Toraya in her home and
incurred some expense for that purpose. Under those
circumstances we may make a reasonable estimate, bearing heavily
against the taxpayer whose inexactitude is of his or her own
making. Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d Cir.
1930). We find that Toraya is entitled to deduct $520 for each
of 1988 and 1989 for reimbursement of Motomi's expenses incurred
in performing business-related activities in her home on Toraya's
behalf.
Adjustments to Purchases Expense
In the notices of deficiency for 1988, 1989, 1990, and 1991,
respondent reduced Toraya's "Purchases Expense" included in cost
of goods sold for those years by $57,733, $36,131, $25,230, and
$24,000, respectively, on the ground that Toraya had not
established that the those amounts were for purchases or were
paid during those years. Subsequently, in a stipulation of
settled issues, respondent conceded that for 1988, 1989, 1990,
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