Wing Y. Kwan - Page 4

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          depreciation expense/section 179 expenses of $9,986, and rent               
          expense of $4,400.                                                          
               Respondent contends that the documents offered by petitioner           
          provide insufficient evidence to support the claimed deductions.            
          Section 7491 is inapplicable here because petitioner has not                
          complied with the requisite substantiation requirements.  Sec.              
          7491(a)(2)(A).                                                              
               Section 162(a) allows a deduction for ordinary and necessary           
          expenses paid or incurred during the taxable year in carrying on            
          a trade or business.  Taxpayers, however, must maintain                     
          sufficient records to establish the amount of claimed deductions.           
          Sec. 6001; sec. 1.6001-1(a), Income Tax Regs.                               
               Section 274(d)(4) imposes stringent substantiation                     
          requirements for the deduction of certain listed property defined           
          under section 280F(d)(4).  Listed property includes, inter alia,            
          automobiles and computers.  Sec. 280F(d)(4)(A).  To deduct                  
          expenses for such listed property, including depreciation,                  
          taxpayers must substantiate by adequate records the following               
          items:  The amount of each separate expenditure, the listed                 
          property’s business and total usage, the date of the expenditure            
          or use, and the business purpose for an expenditure or use.  Sec.           
          274(d); sec. 1.274-5T(b)(6), Temporary Income Tax Regs., 50 Fed.            
          Reg. 46016 (Nov. 6, 1985).  To substantiate a deduction by means            
          of adequate records, a taxpayer must maintain an account book,              






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