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When a taxpayer establishes that he/she has incurred
deductible expenses but is unable to establish the exact amounts,
we can estimate the deductible amounts, but only if the taxpayer
presents sufficient evidence to establish a rational basis for
making the estimates. See Cohan v. Commissioner, 39 F.2d 540,
543-544 (2d Cir. 1930); Vanicek v. Commissioner, 85 T.C. 731, 742-
743 (1985). In estimating the amount allowable, we bear heavily
on the taxpayer whose inexactitude in substantiating the amount of
the expense is of his own making. See Cohan v. Commissioner,
supra at 544. However, without a rational basis for making the
estimate, any allowance we made would amount to unguided largesse.
Williams v. United States, 245 F.2d 559, 560-561 (5th Cir. 1957).
Respondent concedes that petitioners made noncash
contributions during 2002 but maintains that the value of those
contributions did not exceed $1,600. Considering the record
before us, we do not doubt that petitioners made noncash
charitable contributions during 2002. However, they failed to
provide reliable evidence to prove that the amount thereof
exceeded the $1,600 respondent conceded. We therefore hold that
for 2002 petitioners are entitled to a $2,550 charitable
contribution deduction (rather than the claimed $10,953
deduction), comprising $950 for cash contributions and $1,600 for
noncash contributions.
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Last modified: May 25, 2011