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unless the taxpayer substantiates by adequate records
or by sufficient evidence corroborating the taxpayer’s
own statement (A) the amount of such expense or other
item, (B) the time and place of the travel,
entertainment, amusement, recreation, or use of the
facility or property, or the date and description of
the gift, (C) the business purpose of the expense or
other item, and (D) the business relationship to the
taxpayer of persons entertained, using the facility or
property, or receiving the gift. * * *
Section 280F(d)(4) includes, among the definitions of
“listed property”, “any computer or peripheral equipment”.
At the conclusion of the trial in this case, the Court,
recognizing that substantiation was petitioners’ principal
challenge, ordered the parties to develop a form of schedule, to
be filled in by petitioners, which would set forth each item
still in issue, with appropriate references to evidence in the
record for each element necessary to sustain a deduction. The
parties have complied with that order, and the Court relies on
that schedule (petitioners’ substantiation schedule) for
direction to evidence in support of petitioners’ claims.
B. Depreciation
The depreciation deductions here in question are, in
actuality, deductions under section 179, which allows certain
taxpayers to treat as an expense that is not chargeable to
capital account the cost of certain depreciable property. The
deduction under section 179 is allowed for the taxable year in
which the depreciable property is placed in service. The
property here in question consists of a computer, certain
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Last modified: May 25, 2011