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gifts made to such individual during the same
taxable year, exceeds $25. For purposes of this
section, the term “gift” means any item excludable
from gross income of the recipient under section
102 which is not excludable from his gross income
under any other provision of this chapter, but
such term does not include–-
(A) an item having a cost to the tax-
payer not in excess of $4.00 on which the
name of the taxpayer is clearly and perma-
nently imprinted and which is one of a number
of identical items distributed generally by
the taxpayer, or
(B) a sign, display rack, or other pro-
motional material to be used on the business
premises of the recipient.
For certain kinds of expenses otherwise deductible under
section 162(a), such as expenses for gifts, a taxpayer must
satisfy certain substantiation requirements set forth in section
274(d) before such expenses will be allowed as deductions.
In order for petitioner’s claimed gifts to be deductible,
such gifts must satisfy the requirements of not only section
162(a) but also section 274(d). To the extent that petitioner
carries his burden of showing that the claimed gifts satisfy the
requirements of section 162(a) but fails to satisfy his burden of
showing that such gifts satisfy the recordkeeping requirements of
section 274(d), petitioner will have failed to carry his burden
of establishing that he is entitled to deduct such gifts, regard-
less of any equities involved. See sec. 274(d); sec. 1.274-
5T(a), Temporary Income Tax Regs., 50 Fed. Reg. 46014 (Nov. 6,
1985).
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Last modified: November 10, 2007