- 23 - concluding that any amount of the $250,000 loan was paid into the Atherton project. Any interest reserve in that loan has likewise not been shown to be deductible. With respect to the $350,000 loan, petitioners on brief indicate that $212,000 of this loan was used to pay off the remaining amount of the $250,000 loan. For the reasons mentioned above, that portion of the loan would not be deductible. With respect to the remaining portion of that loan, $138,000, there is no documentary evidence showing that amount represents deductible expenses paid into the Atherton project. Petitioners rely on a letter from Mr. Assaad to Mr. Waters and a handwritten note from another representative of Pacific. However, those items indicate only that the remaining amount of the $250,000 loan was increased to $350,000. They do not take the further step of substantiating the increase as deductible expenses. We are mindful that there must be sufficient evidence contained in the record to provide a basis for us to make an estimate and to conclude that a deductible expense was incurred in at least the amount to be allowed. Pratt v. Commissioner, T.C. Memo. 2002-279. We are not required to guess with respect to the amount of deductible expenses. Norgaard v. Commissioner, 939 F.2d 874, 879 (9th Cir. 1991), affg. in part and revg. in part T.C. Memo. 1989-390; Williams v. United States, 245 F.2d 559, 560 (5th Cir. 1957). In the instant case, we bear heavilyPage: Previous 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Next
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