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business. Corbett v. Commissioner, 55 T.C. 884, 887 (1971).
Whether activities carried on by an individual can be
characterized as a trade or business is a question of fact. Id.
at 887. Petitioner has the burden of proof. Rule 142(a); Welch
v. Helvering, 290 U.S. 111 (1933).
Deductions are strictly a matter of legislative grace.
INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992); New
Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934).
Taxpayers must substantiate claimed deductions. Hradesky v.
Commissioner, 65 T.C. 87, 89 (1975), affd. per curium 540 F.2d
821 (5th Cir. 1976). Moreover, taxpayers must keep sufficient
records to establish the amounts of the deductions. Meneguzzo v.
Commissioner, 43 T.C. 824, 831 (1965); sec. 1.6001-1(a), Income
Tax Regs. Generally, except as otherwise provided by section
274(d), when evidence shows that a taxpayer incurred a deductible
expense, but the exact amount cannot be determined, the Court may
approximate the amount, bearing heavily if it chooses against the
taxpayer whose inexactitude is of his own making. Cohan v.
Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930). The Court,
however, must have some basis upon which an estimate can be made.
Vanicek v. Commissioner, 85 T.C. 731, 742-743 (1985). There are
strict substantiation requirements under section 274(d) for items
such as travel expenses and meals.
Respondent stated that up to the date of trial, petitioner
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