- 6 -
He also visited his father on these trips. Petitioner provided
no record of his mileage and failed to meet the strict
substantiation requirements of section 274(d). Accordingly, we
find that petitioner is entitled to deduct only the $382.68 of
union dues expense conceded by respondent.
Petitioner deducted $3,600 of expenses for legal fees and
"claim of right" and $8,150 of other miscellaneous expenses for
the "claim of right". He did not know how the $3,600 amount was
allocated between the two expenses. Legal fees may be deductible
as an itemized deduction under section 212 if they are paid for
the production or collection of income or for the management,
conservation, or maintenance of income producing property.
Petitioner did not substantiate that he paid the legal fees, nor
did he establish his right to deduct them under section 212. In
regards to the "claim of right" expenses, it appears that
petitioner borrowed money from a Mr. Ashley and Mr. Ashley then
sued to collect the money. Petitioner testified that the "claim
of right" expenses were the amounts he transferred to Mr. Ashley
in repayment of the loan. There was no documentation supporting
petitioner's testimony that these payments were actually made.
In any event, it is well established that deductions are not
permitted on account of the repayment of loans. Brenner v.
Commissioner, 62 T.C. 878, 883 (1974); Clark v. Commissioner,
T.C. Memo. 1994-120, affd. without published opinion 68 F.3d 469
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011