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121. Further, if there is a claim for reimbursement for which
there is a reasonable prospect of recovery, the regulations
require that a taxpayer claim the loss in the taxable year in
which it can be ascertained with reasonable certainty whether or
not reimbursement will be received. Sec. 1.165-1(d)(3), Income
Tax Regs. As there is a total lack of evidence with respect to
the existence of a theft loss, the year of discovery of any loss,
and any prospect of reimbursement, we cannot conclude that
petitioner satisfies the requirements for a theft loss for the
taxable year 2001. Respondent is sustained on this issue.
IV. Schedule C Deductions
Section 162(a) permits a deduction for the ordinary and
necessary expenses paid or incurred during the taxable year in
carrying on a trade or business. Expenses that are personal in
nature are generally not allowed as deductions. Sec. 262(a). A
taxpayer is required to maintain records sufficient to establish
the amount of his income and deductions. Sec. 6001; sec. 1.6001-
1(a), (e), Income Tax Regs. A taxpayer must substantiate his
deductions by maintaining sufficient books and records to be
entitled to a deduction under section 162(a). When a taxpayer
establishes that he has incurred a deductible expense but is
unable to substantiate the exact amount, we are generally
permitted to estimate the deductible amount. Cohan v.
Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930). We can
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