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that Michael retained any less power and control than necessary
to tax to him that income. They also have failed to prove that
the trust should not be disregarded as a sham, since the transfer
in trust lacked economic substance. See the discussion of
relevant factors, section III.A.1.c.(1), supra, as set forth in
Muhich v. Commissioner, T.C. Memo. 1999-192. Finally, the Careys
have failed to prove that one or both of them should not be
treated as the owner of all or a portion of the trust on account
of application of one or more of the grantor trust rules found in
sections 673 through 676.
e. Conclusion
We sustain so much of respondent’s determination of a
deficiency in tax as is attributable to his inclusion in the
Careys’ gross income of the trust interest and business gross
receipts.5
5 Respondent has attributed to Michael the trust business
gross receipts without allowing to the Careys the various
offsetting deductions claimed by the trust. We have no occasion
to consider whether the Careys are entitled to those deductions
because they have not made any claim to them. Moreover, while we
assume that some costs were incurred in generating the trust
business gross receipts, we have no basis other than the self-
serving figures on the trust 1995 return for estimating those
costs. A taxpayer must keep sufficient records to substantiate
amounts, such as deductions, required to be shown on a return.
See sec. 1.6001-1(a), Income Tax Regs. While it is within the
purview of this Court to estimate the amount of allowable
deductions where there is evidence that deductible expenses were
incurred, Cohan v. Commissioner, 39 F.2d 540 (2d Cir. 1930), we
must have some basis on which an estimate may be made, Vanicek v.
(continued...)
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