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Additionally, section 274(d) requires, in the case of
claimed deductions for business use of passenger automobiles,
that taxpayers substantiate the amount of business use. In order
to substantiate a deduction attributable to listed property, a
taxpayer must maintain adequate records to show the amount of the
expense, the time and place of use, and the business purpose for
the use. See, e.g., Whalley v. Commissioner, T.C. Memo. 1996-
533. To substantiate a deduction by means of adequate records, a
taxpayer must maintain an account book, a log, a statement of
expense, or trip sheets to establish the element of use. See
sec. 1.274-5T(c)(2)(i), Temporary Income Tax Regs., 50 Fed. Reg.
46017 (Nov. 6, 1985).
Petitioner did not produce any records concerning personal
versus business use of the vehicles. Respondent allowed
petitioner 50 percent of the claimed depreciation on the basis of
oral testimony during the audit examination and the nature of and
facts surrounding petitioner’s business. At trial, petitioner
presented no evidence other than uncorroborated and undocumented
oral testimony. Accordingly, respondent’s determination on this
issue is sustained.
5. Olympic’s Expenses Paid by Petitioner
Petitioner claimed several deductions in its 1992 tax year
for expenses that were paid on behalf of Olympic. These
deductions included $10,931 for legal expenses, $6,128 for
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