Herschel H. and Roberta S. Hoopengarner - Page 15

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          Property                    Basis             Loss                          
          K-Mart              $6,963,500               ($957,102)                     
          Indio               2,930,912                (921,800)                      
          Cowan Ave.          3,526,000           (226,000)                           
          Business Center Dr.     371,251              (371,251)                      
          Petitioners make no argument regarding basis or loss for the                
          Avenida Del Mar property.                                                   
               If the taxpayer fails to keep adequate records but the Court           
          is convinced that deductible expenditures were incurred, the                
          Court may make as close an approximation as it can, bearing                 
          heavily if it chooses upon the taxpayer whose inexactitude is of            
          his own making.  Cohan v. Commissioner, 39 F.2d 540, 544 (2d Cir.           
          1930); Shea v. Commissioner, 112 T.C. 183, 187 (1999); see also             
          Sandoval v. Commissioner, T.C. Memo. 2000-189 (we may estimate              
          basis).  However, there must exist some reasonable evidentiary              
          basis upon which to make such an estimate.  Vanicek v.                      
          Commissioner, 85 T.C. 731, 742-743 (1985); Edwards v.                       
          Commissioner, T.C. Memo. 2002-169.                                          
               We are mindful that there must be sufficient evidence 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              







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