- 29 - “hard costs” and that Mr. Assaad paid the soft costs from his own funds. Petitioners claim that respondent allowed those expenses, which were claimed in their 1992 return, in his examination of the 1996 and 1997 returns. The only item in the record regarding these expenses is the Schedule C attached to the 1992 return that petitioners filed. The fact that a return is signed under penalty of perjury is not sufficient to substantiate deductions claimed on it. Wilkinson v. Commissioner, 71 T.C. 633, 639 (1979). Petitioners provided no direct or indirect evidence to substantiate their so-called “soft costs” of construction. We have no rational basis for estimating those expenses, verifying whether they were in fact incurred, or determining their deductibility. Further, petitioners have not adduced sufficient proof to show that those costs were not paid with the proceeds of the construction loans. Petitioners claim, but point to no evidence of record to establish, that respondent allowed the expenses as part of his examination of the 1996 and 1997 returns. 7. Conclusion Because petitioners have failed to substantiate properly, or otherwise present a reasonable evidentiary basis for estimating, the expenses that were paid into the Atherton project in amounts greater than the amounts that respondent allowed in the notice of deficiency, we sustain respondent’s computation of the NOL forPage: Previous 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 Next
Last modified: May 25, 2011