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normal or customary within a particular trade, business, or
industry. Deputy v. Du Pont, 308 U.S. 488, 495 (1940). An
expense is necessary if it is appropriate and helpful for the
development of the business. Commissioner v. Heininger, 320 U.S.
467, 471 (1943). Section 262, in contrast, precludes deduction
of “personal, living, or family expenses.”
The breadth of section 162(a) is tempered by the requirement
that any amount claimed as a business expense must be
substantiated, and taxpayers are required to maintain records
sufficient therefor. Sec. 6001; Hradesky v. Commissioner, 65
T.C. at 89-90; sec. 1.6001-1(a), Income Tax Regs. When a
taxpayer adequately establishes that he or she paid or incurred a
deductible expense but does not establish the precise amount, we
may in some circumstances estimate the allowable deduction,
bearing heavily against the taxpayer whose inexactitude is of his
or her own making. Cohan v. Commissioner, 39 F.2d 540, 544 (2d
Cir. 1930). There must, however, be sufficient evidence in the
record to provide a basis upon which an estimate may be made and
to permit us to conclude that a deductible expense, rather than a
nondeductible personal expense, was incurred in at least the
amount allowed. Williams v. United States, 245 F.2d 559, 560
(5th Cir. 1957); Vanicek v. Commissioner, 85 T.C. 731, 742-743
(1985).
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