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sec. 1.274-5T(a)(4), Temporary Income Tax Regs., 50 Fed. Reg.
46014 (Nov. 6, 1985).
In order for petitioner to claim automobile expense
deductions through either Special Occasions or Special O, those
expenses must have actually been paid or incurred by either
Special Occasions or Special O pursuant to section 162(a).
However, there is no evidence in the record to indicate that
either Special Occasions or Special O incurred automobile
expenses by reimbursing petitioner for any automobile expenses
incurred on their behalf. Additionally, even if petitioner was
able to establish that Special Occasions or Special O incurred
such expenses, such expenses must be substantiated pursuant to
section 274(d). Even if such an expense would otherwise be
deductible, the deduction may still be denied if there is
insufficient substantiation to support it. See sec. 1.274-5T(a),
Temporary Income Tax Regs., 50 Fed. Reg. 46014 (Nov. 6, 1985).
Neither Special Occasions, Special O, nor petitioner kept
adequate records of claimed automobile expenses.
In the alternative, petitioner contends that if she is not
entitled to deduct her claimed automobile expenses, she is
entitled to include such claimed expenses in her bases in Special
Occasions and Special O. In any event, the only evidence
presented in support of petitioner's claimed expenses is the
unverified testimony of petitioner, which without supporting
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