Vittorio Kellum - Page 14

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          gross income derived from the activity for the taxable year.                
          Sec. 183(a) and (b)(2).                                                     
               As with other deductions discussed herein, petitioner bears            
          the burden of proving he is entitled to claimed business                    
          deductions.  See Rule 142(a); New Colonial Ice Co. v. Helvering,            
          292 U.S. 435, 440 (1934).  A taxpayer is required to maintain               
          records sufficient to substantiate deductions that he or she                
          claims on his or her tax return.  Sec. 6001; sec. 1.6001-1(a),              
          Income Tax Regs.  Section 274(d) provides a strict substantiation           
          requirement for certain expenses related to travel (including               
          meals and lodging while away from home), entertainment, gifts,              
          and certain types of property such as a passenger automobile, a             
          computer or peripheral equipment, or a cellular telephone or                
          similar telecommunication equipment.6  Under section 274(d), a              
          deduction is not allowed unless the taxpayer is able to                     
          substantiate the expense by adequate records or by sufficient               
          evidence corroborating the taxpayer’s own statement establishing            
          the amount, time, place, and business purpose of the expense.               
               Irrespective of whether petitioner’s insurance activity                
          qualifies as a “trade or business” under section 162 or whether             
          petitioner’s expenses are deductible under section 183,                     
          petitioner has failed to properly substantiate his claimed                  

               6  Sec. 274(d) overrides the principle established in Cohan            
          v. Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930), that the              
          Court may estimate expenses in some circumstances.                          





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