- 13 -
6001; Meneguzzo v. Commissioner, 43 T.C. 824, 831-832 (1965).
Generally, except as otherwise provided by section 274(d), when
evidence shows that a taxpayer incurred a deductible expense, but
the exact amount cannot be determined, the Court may approximate
the amount. See Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d
Cir. 1930). The Court, however, must have some basis upon which
an estimate can be made. See Vanicek v. Commissioner, 85 T.C.
731, 742-743 (1985).
A strict substantiation requirement exists under section
274(d)(3) and (4) for gifts and for certain property listed under
section 280F(d)(4), which includes passenger automobiles.
Taxpayers must substantiate by adequate records the following
items in order to claim deductions: (1) The amount of such
expense or other item; (2) the time and place of the travel, or
use of the facility or property, or the date and description of
the gift; (3) the business purpose of the expense or other item;
and (4) the business relationship. See sec. 274(d).
To substantiate a deduction by adequate records, a taxpayer
must maintain an account book, diary, log, statement of expense,
trip sheets, and/or other documentary evidence which, in
combination, are sufficient to establish each element of
expenditure or use. See sec. 1.274-5T(c)(2)(i), Temporary Income
Tax Regs., 50 Fed. Reg. 46017 (Nov. 6, 1985).
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