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Foods owed to petitioner. Moreover, petitioner introduced no
business records showing how much Brooks Foods had purchased from
Egan Oil nor any records of what the outstanding balance was from
time to time. We are left to speculate as to the amount and are
therefore unable to estimate the amount of the deduction under
the Cohan rule. See Cohan v. Commissioner, supra at 543-544;
Worthington v. Commissioner, T.C. Memo. 1999-113; Kim v.
Commissioner, T.C. Memo. 1995-598. Introducing evidence of a
debt is not sufficient to substantiate the deduction of a
different amount. The amount of the deduction is what must be
substantiated. See Hradesky v. Commissioner, supra.
Petitioner also argues that respondent should be estopped
from arguing that petitioner lacked the necessary documentation.
Petitioner, relying on a previous audit of petitioner’s gross
receipts for 1994, explained that he considered the year closed
and therefore destroyed records for 1994. We disagree. While
the gross receipts audit may have shown the amount sold, it in no
way establishes how much Brooks Foods purchased or, more
importantly, how much Brooks Foods owed. Petitioner failed to
introduce evidence of ledgers or journal entries he presumably
kept showing his accounts receivable and the outstanding balance,
essential information that would prove the correct amount of the
deduction.
Moreover, we are skeptical how an astute businessman like
petitioner expected to be repaid the amount owed if he lacked the
documentation to show how much Brooks Foods owed. If petitioner
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