- 12 - expenditures, nor did he testify as to the amount he may have paid for the advertisements and insurance. We are unable to estimate an amount for the advertisements and insurance because petitioner failed to provide evidence upon which we can make a rational estimate. See Vanicek v. Commissioner, supra at 743. We hold for respondent as to these expenses. 3. Utilities Petitioner deducted amounts for Internet and telephone expenses. Petitioner produced bills from U.S. Billing, Inc., and Sprint. The telephone bills do not indicate the purpose of the various calls, nor did petitioner testify as to whether each call was personal or business. We are not convinced the utility expenses were incurred in the normal course of petitioner’s trade or business. Further, we are unable to estimate an amount for the utilities because petitioner failed to provide evidence upon which we can make a rational estimate. See id. Therefore, petitioner cannot deduct utilities in excess of the amount allowed by respondent. 4. Taxes and Licenses Petitioner deducted $85 in 1996 in licensing and taxes related to the incorporation of Export. Fees paid to a State for incorporation are organization costs, which are generally considered capital expenditures. See FMR Corp. & Subs. v.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
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