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Bldg., Inc. v. State, Dept. of Soc. & Health Servs., 702 P.2d
459, 461 (Wash. 1985).
We are not required to accept the self-serving testimony of
a taxpayer or witnesses closely aligned with the taxpayer’s
position in circumstances where the testimony is uncorroborated
by other reliable sources and is not credible. See Tokarski v.
Commissioner, 87 T.C. 74, 77 (1986). The dearth of credible
evidence in support of petitioners’ position that an oral lease
covered the Dobbe residence during the relevant periods and the
failure of petitioners to prove that any rent was paid for the
alleged oral lease compel a conclusion that the Dobbe residence
was not leased to Holland America. After evaluating the facts in
this record and weighing them against the testimony of Mr. and
Mrs. Dobbe and their accountant, we hold that petitioners have
failed to prove that Mr. and Mrs. Dobbe orally leased their
residence to Holland America at any time from 1989 through FYE
1993. See Rule 142(a); cf. Ban-Co Inv. Co. v. Loveless, supra at
573 (“the existence of the oral agreement was proven by
substantial evidence (including documentary evidence) other than
merely the testimony of the parties alleging it”).
II. Was Holland America Entitled To Deduct Various Expenses as
Ordinary and Necessary Business Expenses?
Section 162(a) permits a taxpayer to deduct expenses paid or
incurred during the taxable year in carrying on the taxpayer’s
trade or business. Deductions are strictly a matter of
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