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depreciation expense of $2,810, and other expenses of $1,586. On
the Schedule C pertaining to petitioner’s construction business,
petitioner reported gross income of $1,000 and a net loss of
$10,763. Respondent disallowed deductions claimed on that
Schedule C for car and truck expenses of $1,356, depreciation
expense of $1,501, insurance expense of $1,422, and other
expenses of $5,326.
Respondent contends that the documents offered by petitioner
provide insufficient evidence to support the claimed deductions.
We agree. Section 7491 is inapplicable here because petitioners
have 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
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