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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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