Kai-Chung C. and Meekhing T. Lam - Page 5

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               Petitioners introduced many undated documents.  Petitioner             
          testified that he incurred some expenses in 1994 because he had             
          placed the documents for those expenses in the box meant to                 
          contain only documentation of expenses incurred in 1994.  Other             
          expenses, however, were supposedly incurred in 1995 because                 
          petitioner had placed the documents for those expenses in the box           
          meant to contain only documentation of expenses incurred in 1995.           
               The invoices for repair and maintenance expenses that were             
          on another company’s letterhead and were dated did not show                 
          whether petitioner actually paid them.  For example, petitioner             
          submitted a $252 invoice for painting and a $145 invoice for lawn           
          care, but he introduced no corresponding documentary proof that             
          he paid for the services.  Petitioner’s testimony was the only              
          evidence petitioner submitted indicating that he paid the repair            
          and maintenance expenses.                                                   
               Petitioner also submitted more than 20 different invoices              
          from a hardware store to support his deduction for supplies.                
          Petitioner did not, however, submit corresponding receipts,                 
          canceled checks, or credit card statements that would have shown            
          he paid the amounts indicated on these invoices.                            
               Regarding bad debt expenses, petitioner testified that he              
          occasionally made small loans in his real estate business to                
          potential home buyers.  He further testified that when a                    
          purchaser needed larger sums of money, $10,000 or greater, he               






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