- 27 -
amount of the expenditure or use based on the appropriate measure
(mileage may be used in the case of automobiles); (2) the time and
place of the expenditure or use; (3) the business purpose of the
expenditure or use; and in the case of entertainment, (4) the
business relationship to the taxpayer of each expenditure or use.
See sec. 274(d).
To meet the adequate records requirements of section 274, a
taxpayer must maintain some form of records and documentary
evidence that in combination are sufficient to establish each
element of an expenditure or use. See sec. 1.274-5T(c)(2),
Temporary Income Tax Regs., supra. A contemporaneous log is not
required, but corroborative evidence to support a taxpayer’s
reconstruction of the elements of expenditure or use must have “a
high degree of probative value to elevate such statement” to the
level of credibility of a contemporaneous record. Sec. 1.274-
5T(c)(1), Temporary Income Tax Regs., 50 Fed. Reg. 46016 (Nov. 6,
1985).
A. Automobile Expenses
Petitioners owned three automobiles in 1993, including a 1988
Toyota Camry. Petitioners claimed as deductions in 1993 and 1994
miscellaneous and depreciation expenses for use of the Toyota in
petitioner’s law practice and to travel to and from his farm and
the various rental properties. Petitioners claimed all of the
Page: Previous 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 NextLast modified: May 25, 2011