- 5 -
Discussion
Section 162(a) allows a deduction for all ordinary and
necessary expenses incurred in carrying on a trade or business.
Section 274(d), however, provides that no deduction is allowed
for certain expenses unless the taxpayer “substantiates by
adequate records or by sufficient evidence corroborating the
taxpayer’s own statement”, inter alia, the time and place of the
travel and the business purpose of the expense. The deductions
that fall within section 274(d) include travel expenses including
meals and lodging, sec. 274(d)(1), and deductions “with respect
to any listed property (as defined in section 280F(d)(4)”, sec.
274(d)(4). Included within the ambit of “listed property” are
passenger automobiles. Sec. 280F(d)(4)(A)(i). To substantiate
the adequate records requirement for a passenger automobile, “a
taxpayer shall maintain an account book, diary, log, statement of
expense, trip sheets, or similar record * * * which, in
combination, are sufficient to establish each element of an
expenditure”. Sec. 1.274-5T(c)(2)(i), Temporary Income Tax
Regs., 50 Fed. Reg. 46017 (Nov. 6, 1985). To substantiate a
business purpose for listed property “the record must contain
sufficient information as to each element of every business/
investment use.” Sec. 1.275-5T(c)(2)(ii)(C), Temporary Income
Tax Regs., 50 Fed. Reg. 46018 (Nov. 6, 1985).
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011