-12- agreement between the parties. Thus, if petitioner were required to post a $1,000,000 bond by the Port lease, such a requirement would have been included in the lease. In addition, petitioners claimed at trial that the $1 million bond was obtained from State Farm. Inasmuch as petitioners were able to produce a copy of the liability policy obtained from State Farm, we fail to understand why petitioners were unable to produce a copy of the alleged bond, if it existed, from State Farm. See Wichita Terminal Elevator Co. v. Commissioner, supra. Finally, petitioners failed to produce documentary evidence of payment for the premium for the alleged bond. In view of the foregoing, respondent's determination regarding the deduction for "Insurance" is sustained. 3. Legal Services Petitioners claimed a deduction for "Legal Services" in the amount of $1,300. Petitioners contend that this deduction represents amounts paid in cash to Mr. Hughes for his services. Respondent disallowed the deduction in its entirety for lack of substantiation. As a general rule, in the case of expenses that are not subject to the substantiation requirements of section 274(d), if the record provides sufficient evidence that a taxpayer has incurred a deductible expense, but the taxpayer is unable to adequately substantiate the amount of the deduction to which hePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011