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274(d) imposes stringent substantiation requirements for
deductions related to travel, entertainment, gifts, and "listed
property (as defined in section 280F(d)(4))". Passenger
automobiles are listed property under section 280F(d)(4)(i).
Section 274(d) denies these deductions 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 travel, entertainment,
amusement, recreation, or use of the facility or
property, or the date and description of the gift, (C)
the business purpose of the expense or other item, and
(D) the business relationship to the taxpayer of
persons entertained, using the facility or property, or
receiving the gift. * * *
Thus, under section 274(d), deductions for automobile expenses,
travel expenses, and meals and entertainment expenses may not be
estimated. Instead the taxpayer must provide adequate records or
corroborate testimony with other evidence.
The limited amount of evidence submitted by petitioners in
support of this item is insufficient to satisfy the strict
substantiation requirements of section 274(d). Accordingly, on
this record, the Court holds that petitioners are not entitled to
deduct the $275 in car and truck expenses claimed on their 1997
Schedule C for Spanky's. Respondent is sustained on this issue.
The third issue is whether petitioners are entitled to a $22
Schedule C depreciation deduction. Section 167(a) allows
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