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280F(d)(4). To meet the strict substantiation requirements, the
taxpayer must substantiate the amount, time, place, and business
purpose of the expenses. Sec. 274(d); sec. 1.274-5T, Temporary
Income Tax Regs., 50 Fed. Reg. 46006 (Nov. 6, 1985).
Petitioner presented no substantiation of the NOL, which he
argued was carried forward from a prior year. Pursuant to
section 172(b), a taxpayer can carry an NOL back 2 years and any
remaining loss forward 20 years, unless an election is made to
waive the carryback. Although petitioner did provide copies of
tax returns from prior years, these returns merely contain
assertions made by petitioner and do not substantiate either that
an NOL was sustained or that any amount was available to carry
forward. Petitioner made statements at trial indicating he
concedes this issue. With or without such a concession, we hold
that petitioner is not entitled to a deduction for an NOL
carryover.
The second issue for decision is whether petitioner is
entitled to a deduction for employee business expenses of
$19,105.30. As a general rule, ordinary and necessary business
expenses are deductible in the year paid, while personal, family,
and living expenses are not deductible. Secs. 162(a), 262(a).
Deductible business expenses may be paid by a taxpayer who is in
the trade or business of being an employee. Primuth v.
Commissioner, 54 T.C. 374, 377-378 (1970). An ordinary expense
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