Perry H. Kay, Sr. - Page 7

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          substantiation to support it.  Sec. 1.274-5T(a), Temporary Income           
          Tax Regs., supra.                                                           
               A.   Vehicle-Related Expenses                                          
               On Schedule C, petitioner claimed both a section 179 expense           
          deduction for $7,000 and business-related vehicle expenses of               
          $4,182 on the same vehicle.  It is unclear from the record                  
          whether petitioner used actual expenses or the standard mileage             
          rate to calculate the claimed deduction of $4,182.  No evidence             
          was introduced to substantiate any actual expenses incurred and             
          the number of business miles claimed on Schedule C multiplied by            
          the 1998 standard mileage rate is not equal to the amount of the            
          claimed deduction.3                                                         
               Actual expenses related to the business use of a vehicle are           
          deductible under section 274, if substantiated.  If actual                  
          expenses were used to determine the business-related vehicle                
          expenses claimed, petitioner, having failed to substantiate any             
          such expense, is not entitled to the business-related vehicle               
          expenses claimed.  See sec. 274(d).                                         
               Alternatively, a taxpayer may choose to use the business               
          standard mileage rate in lieu of the actual automobile expenses.            
          Nash v. Commissioner, 60 T.C. 503, 520 (1973); Parker v.                    
          Commissioner, T.C. Memo. 1993-15; Rev. Proc. 97-58, 1997-2 C.B.             

               3    Petitioner reported 12,370 business-related miles and             
          claimed a deduction of $4,182.  The 1998 standard mileage rate of           
          32.5 cents per mile multiplied by 12,370 miles equals $4,020.25.            

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