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testimony with respect to expenses of this genre consists in its
entirety of the following from Mrs. Deihl:
Q Okay. I also see some major expenses for
Circuit City during that time frame; do you know what
these were for?
A The only thing I can think of is it would be
computers but I’m not really sure.
Q Computers for personal use or for--
A No. Computers--
Q --business?
A No, for business use. It would either be
computers or equipment for the company or for the
buildings.
Given the admitted ambiguity in this testimony, i.e., Mrs. Deihl
conceded that she was “not really sure”, petitioners have failed
to establish either what was purchased or the business use
therefor. Moreover, computers or peripherals would be subject to
the strict substantiation rules of section 274(d) as listed
property, absent a showing that the exception set forth in
section 280F(d)(4)(B) should apply.
Petitioners also claim an outlay by KareMor on September 5,
1997, to Synthony Music for “MUSICAL EQUIP/ACC/SVC”, as to which
Mrs. Deihl testified: “Probably in-house, I would think that was
part of the in-house recording equipment that we have.” From
this obtuse statement, the Court can draw little and certainly
not adequate substantiation of a business expenses under section
162.
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