Benjamin O. & Linda L. Agbaniyaka - Page 10

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          tion claimed.  INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84               
          (1992).  A taxpayer is required to maintain records sufficient to           
          establish the amount of any deduction claimed.  Sec. 6001; sec.             
          1.6001-1(a), Income Tax Regs.                                               
               Section 162(a) generally allows a deduction for ordinary and           
          necessary expenses paid or incurred during the taxable year in              
          carrying on any trade or business.6  The determination of whether           
          an expenditure satisfies the requirements for deductibility under           
          section 162 is a question of fact.  See Commissioner v.                     
          Heininger, 320 U.S. 467, 475 (1943).  In general, an expense is             
          ordinary if it is considered normal, usual, or customary in the             
          context of the particular business out of which it arose.  See              
          Deputy v. du Pont, 308 U.S. 488, 495 (1940).  Ordinarily, an                
          expense is necessary if it is appropriate and helpful to the                
          operation of the taxpayer’s trade or business.  See Commissioner            
          v. Tellier, 383 U.S. 687, 689 (1966); Carbine v. Commissioner, 83           
          T.C. 356, 363 (1984), affd. 777 F.2d 662 (11th Cir. 1985).                  
               For certain kinds of expenses otherwise deductible under               
          section 162(a), such as business expenses relating to “listed               

               6If it is established that a taxpayer paid or incurred                 
          ordinary and necessary expenses in carrying on a trade or busi-             
          ness and if sec. 274 does not apply to such expenses, we are                
          generally permitted to estimate the amount of deductible expenses           
          if we are convinced from the record that such expenses were paid            
          or incurred by the taxpayer and that we have a basis upon which             
          to make such an estimate.  Cohan v. Commissioner, 39 F.2d 540,              
          544 (2d Cir. 1930).                                                         

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