Tina & Sheafen Kuo - Page 5




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          upon which estimates may be made.  See Vanicek v. Commissioner,             
          85 T.C. 731, 743 (1985).  Furthermore, section 274(d) provides              
          that, unless the taxpayer complies with strict substantiation               
          rules, no deduction is allowable for any traveling expenses under           
          section 162, for any entertainment expenses, or with respect to             
          any listed property.  See sec. 274(d)(1), (2), (4).  The taxpayer           
          must substantiate the amount, time, place, and business purpose             
          of these expenses by adequate records or by sufficient evidence             
          corroborating his own statement.  See sec. 274(d).  These                   
          substantiation rules of section 274(d) supersede the Cohan                  
          doctrine.  See Sanford v. Commissioner, 50 T.C. 823, 827 (1968),            
          affd. 412 F.2d 201 (2d Cir. 1969).                                          
               Petitioner husband (Mr. Kuo) testified that in 1996 he was             
          the sole proprietor of a business named Kuos Technologies which             
          was involved in the development of a computer security system.              
          Assuming arguendo that Mr. Kuo in fact was engaged in a trade or            
          business during 1996, petitioners have failed to produce any                
          reliable evidence that he paid business expenses in excess of               
          those allowed as deductions by respondent.  Furthermore, the                
          testimony by Mr. Kuo at trial indicated that many of the expenses           
          claimed are nondeductible personal expenses.  Similarly,                    
          petitioners failed to produce any reliable evidence showing the             
          proper amounts of additional rental expenses.  We note that, even           
          if petitioners had provided such evidence, the propriety of the             






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