Harout and Manik Gapikia - Page 5




                                        - 5 -                                         
          if an expenditure is motivated primarily by personal                        
          considerations, no deduction generally will be allowed.  See                
          Henry v. Commissioner, 36 T.C. 879, 884 (1961).                             
               An individual may engage in the trade or business of                   
          rendering services as an employee.  See O’Malley v. Commissioner,           
          91 T.C. 352, 363-364 (1988), affd. 972 F.2d 150 (7th Cir. 1992);            
          Primuth v. Commissioner, 54 T.C. 374, 377 (1970).  Consequently,            
          an employee’s business expenses may be deductible under section             
          162.  See Johnson v. Commissioner, 115 T.C. 210, 217 (2000);                
          O’Malley v. Commissioner, supra; Primuth v. Commissioner, supra             
          at 377-378.                                                                 
               Deductions are strictly a matter of legislative grace, and a           
          taxpayer must meet the specific statutory requirements for any              
          deduction claimed.  See INDOPCO, Inc. v. Commissioner, 503 U.S.             
          79, 84 (1992); New Colonial Ice Co. v. Helvering, 292 U.S. 435,             
          440 (1934).  Taxpayers are required to maintain records                     
          sufficient to substantiate their claimed deductions.  See sec.              
          6001; sec. 1.6001-1(a), Income Tax Regs.  Under certain                     
          circumstances, if claimed deductions are not adequately                     
          substantiated, we may estimate them, provided we are convinced              
          that the taxpayer has incurred such expenses and we have a basis            
          upon which to make an estimate.  See Cohan v. Commissioner, 39              
          F.2d 540, 543-544 (2d Cir. 1930); Vanicek v. Commissioner, 85               
          T.C. 731, 743 (1985).                                                       






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