- 13 -
amount of rent she paid to petitioner. Additionally, the rent
checks and receipts for rental payments to petitioner in the
record total less than the amount respondent asserts petitioner
received as rent. After reviewing the evidence and testimony, we
conclude that petitioner had unreported rental income in the
amounts of $1,388, $3,270, $3,360, and $1,775 in 1985, 1986,
1987, and 1988, respectively.
The Deductions
Deductions are a matter of legislative grace, and the
taxpayer has the burden of showing that such taxpayer is entitled
to any deduction claimed. Rule 142(a); INDOPCO, Inc. v.
Commissioner, 503 U.S. 79, 84 (1992). Taxpayers must
substantiate amounts claimed as deductions, credits, etc., by
maintaining the records necessary to establish such entitlement.
Sec. 6001; sec. 1.6001-1(a) Income Tax Regs.; see Hradesky v.
Commissioner, 65 T.C. 87 (1975), affd. per curiam 540 F.2d 821
(5th Cir. 1976).
A. Depreciation
On his 1985, 1986, and 1987 tax returns, petitioner claimed
a depreciation deduction of $1,138.50 for a 1985 Chrysler Laser
(the Chrysler). On his 1986 and 1987 tax returns, petitioner
claimed depreciation deductions of $15,600 and $22,800,
respectively, for a 1986 Rolls Royce Silver Spirit (the Rolls
Royce). On his 1985 tax return, petitioner claimed Schedule E
depreciation expenses of $2,713.15 for an oil well and a
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011