- 8 - however, at the very least his testimony casts doubt on his assertion that WTS was a separate business.5 Even if WTS was a separate business, each of the claimed expense deductions fails to satisfy one or more requirements to be deductible. With respect to travel, meals, and entertainment expenses, petitioner has not met the substantiation requirements of section 274(d). Although petitioner introduced a number of receipts, they do not describe the business purpose of the expenses or the business relationship to petitioner of the persons he entertained. See sec. 274(d); sec. 1.274-5T(b), Temporary Income Tax Regs., supra. Petitioner testified that he purchased a vehicle that he used exclusively for WTS-related business, even though title to the vehicle was held in petitioners’ names rather than in WTS’s name. Because the vehicle was listed property as defined in section 280F(d)(4)(A), deductions related to the vehicle are also subject to the heightened substantiation requirements of section 274(d). Petitioner did not keep a mileage log, however, or otherwise corroborate his testimony concerning the business purpose of the vehicle. See sec. 274(d); sec. 1.274-5T(c), Temporary Income Tax Regs., 50 Fed. Reg. 46014 (Nov. 6, 1985). 5 Petitioner’s belief that WTS was related to his employment with SBOE may explain why he originally claimed the $12,488 of additional Schedule C deductions as unreimbursed employee expenses. See supra note 3.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011