- 44 -
of the renovation of the 5-4 Ballroom, a letter from Joan M.
Miller, confirming petitioners’ payment of $5,888 of chapter 11
bankruptcy costs in 1993,18 and a statement from Rafael Rosario
acknowledging that he was paid $3,000 for “carpentry, painting,
and electrical work” at the 5401-9 S. Broadway property. Neither
petitioners nor their accountant offered any satisfactory
explanation as to why additional documentation was not provided.
Although petitioners did not introduce substantiation to
fully document all the Schedule C expenses they claimed for 1992
and 1993, petitioners did substantiate some expenses. In
addition, we are convinced from our review of all the evidence
that petitioners incurred and paid at least some of the claimed
expenses for which documentation has not been provided.
Unfortunately, with respect to most of the undocumented expenses,
petitioners did not provide any factual record from which we
might estimate the expenses they paid. See Vanicek v.
Commissioner, 85 T.C. 731, 743 (1985). Therefore, using our best
judgment and bearing heavily against petitioners because this
inexactitude is of their own making, Cohan v. Commissioner, 39
F.2d 540, 543-544 (2d Cir. 1930), we find that the following
expenses have either been documented or are allowable under Cohan
with respect to the 5401-9 S. Broadway property as follows:
18Petitioners did not offer any explanation of why they
claimed the bankruptcy costs were deductible.
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