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taxpayer may substantiate the deduction through the use of a
reasonable reconstruction of the lost records. Sec. 1.274-
5T(c)(4) and (5), Temporary Income Tax Regs., 50 Fed. Reg. 46021-
46022 (Nov. 6, 1985). Here, no attempt to reconstruct
petitioners’ records was made. Petitioners described the type of
records claimed to have been maintained and stolen, but, except
for petitioner’s generalized testimony on the point, they did not
provide the Court with sufficient information that would allow
the lost records, if any, to be reasonably reconstructed.
Because petitioners failed to substantiate, either by original or
reconstructed records, the deduction claimed for car and truck
expenses, respondent’s disallowance of that deduction is
sustained.
The deduction for the lease expense relates to the Honda
Accord. We accept petitioner’s estimate that 60 percent of the
usage of this car related to her business. According to the
lease, four monthly payments of $255.13 were due during 1996.
We accept petitioner’s testimony that all four of these payments,
totaling $1,020.52, were made as due during 1996. They are
entitled to a deduction of 60 percent of this amount.
The $3,765 deduction for “Other expenses” consists of the
following items:
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Last modified: May 25, 2011