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cost basis is decreased by the amount of any depreciation
previously allowed but not by less than the amount allowable with
respect to the property. Sec. 1016(a)(2); sec. 1.1016-3(a),
Income Tax Regs.
Taxpayers generally bear the burden of proving entitlement
to costs and deductions claimed. Bennett Paper Corp. & Subs. v.
Commissioner, 699 F.2d 450, 453 (8th Cir. 1983), affg. 78 T.C.
458 (1982). However, as stated previously herein, this Court may
estimate costs and allowable deductions under certain
circumstances. Cohan v. Commissioner, 39 F.2d at 543-544. Any
such estimate, however, must have a reasonable evidentiary basis.
Vanicek v. Commissioner, 85 T.C. 731, 742-743 (1985). Without
such a basis, any allowance would amount to unguided largesse.
Williams v. United States, 245 F.2d 559, 560 (5th Cir. 1957).
After reviewing the evidence presented by petitioners in
support of their claimed adjusted basis in the Barracuda, the
Court finds that petitioners failed to substantiate a basis in
the Barracuda in excess of the amount allowed by respondent in
the notice of deficiency. Respondent is sustained on this issue.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
for respondent.
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