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Petitioners base the amount of the Schedule C car expense on
estimates they made after the mileage was incurred--the only
documentary evidence provided by petitioners is a summary
prepared in anticipation of trial and dated several years after
the actual use of the car. Petitioners likewise did not present
any reliable substantiation of the commission, fee, and supply
expenses reported on their Schedule C. We conclude that
petitioners have not substantiated these expenses and therefore
are not entitled to any deductions therefor. Secs. 274(d),
6001.3
Petitioners admit that the car and truck expense on the
Schedule C is the same expense that is listed as a miscellaneous
itemized deduction. Petitioners are not entitled to a
miscellaneous itemized deduction for this expense for the same
reasons that they are not entitled to the Schedule C deduction.
The remaining deductions claimed by petitioners are the
miscellaneous itemized deductions for the professional fees,
copying expense, telephone expense, and safe deposit box.
Because these expenses total less than 2 percent of petitioners’
3Based on our holding, we need not reach respondent’s
argument that petitioner was not engaged in the research activity
for profit within the meaning of sec. 183(a). See also
Commissioner v. Groetzinger, 480 U.S. 23, 35 (1987) (stating that
a taxpayer is engaged in a trade or business if the taxpayer is
involved in the activity with the primary purpose of making a
profit). Likewise, we need not consider whether the research
expenses were startup expenditures under sec. 195(c).
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