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market value of that use a taxpayer must: (1) Show that any
payment for such use would be allowable as a deduction under
section 162 or section 167 and (2) satisfy the substantiation
requirements of section 274(d) and the regulations thereunder by
adequate records (adequate records requirement) or by sufficient
evidence corroborating their own statements (sufficient evidence
requirement). See sec. 274(d)(4); sec. 1.274-5T(c)(1),
(e)(1)(i), Temporary Income Tax Regs., 50 Fed. Reg. 46017, 46026
(Nov. 6, 1985); sec. 1.132-5(a)(1)(ii), Income Tax Regs.32
In order to meet the adequate records requirement, a tax-
payer must maintain an account book, diary, log, or similar
record, made at or near the time of the expenditure or use, which
32Sec. 274(d) provides in pertinent part:
SEC. 274. DISALLOWANCE OF CERTAIN ENTERTAINMENT, ETC.,
EXPENSES.
(d) Substantiation Required.--No deduction or credit
shall be allowed--
* * * * * * *
(4) with respect to any listed property (as de-
fined in section 280F(d)(4)),
unless the taxpayer substantiates by adequate records
or by sufficient evidence corroborating the taxpayer’s
own statement (A) the amount of such expense or other
item, (B) the time and place of the * * * use of the
facility or property * * *, (C) the business purpose of
the expense or other item * * *.
The term “listed property” is defined in section 280F(d)(4) to
include passenger automobiles. Sec. 280F(d)(4)(A)(i).
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