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only evidence presented at trial was a bank statement for 1 month
of a checking account in the name of Mrs. Cisneros showing
various deposits and withdrawals, with the withdrawals
purportedly reflecting the "losses" sustained. The Court rejects
such evidence. Petitioners have not established any losses to
offset the $1,000 winnings. Respondent is sustained on this
issue.
With respect to the second issue regarding the disallowed
itemized deductions, as noted above, respondent disallowed all
the charitable contributions claimed by petitioners for 1998 and
1999. Petitioners presented canceled checks at trial reflecting
charitable contributions totaling $30 for 1998 and $62 for 1999.
On this record, the Court is satisfied that petitioners are
entitled to charitable contribution deductions of $300 for each
year at issue in accordance with this Court's discretionary
authority under Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d
Cir. 1930).
As to the employee business expenses that were disallowed,
the record shows that the amounts claimed on the returns were
arbitrarily determined by Mr. Beltran, and those amounts cannot
be recognized. Under section 274(d) and the regulations
thereunder, such expenses are subject to strict substantiation
rules that require "adequate records" through either an account
book, diary, statement of expense, or similar record, as well as
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