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consideration additional Schedule C, Profit or Loss From
Business, expenses claimed by petitioner in connection with his
self-employment income involving the sale of real estate.
We are convinced from the record of this case that
petitioner incurred expenses in the conduct of his real estate
business in excess of the amount allowed by respondent. In such
circumstances, even though petitioner has not fully satisfied the
substantiation requirements, there is a basis on which to
estimate the expenses incurred. See Cohan v. Commissioner, 39
F.2d 540 (2d Cir. 1930).
During the year 2002, petitioner incurred expenses operating
an automobile in the conduct of his real estate business.
Petitioner had sufficient records for us to find that he operated
his automobile at least 100 miles per week, or 5,200 miles for
the year, in the pursuit of his real estate business. For the
taxable year 2002, taxpayers, who were entitled to claim use of
an automobile for business purposes, could use the standard
allowance of 36 cents per mile in lieu of claiming depreciation
and operating expenses. Accordingly, petitioner is entitled to
deduct $1,872 as a Schedule C business expense for 2002.
During the year 2002 petitioner maintained a room in his
home as his office, which represented one-seventh of his
residence. Petitioner’s brother also slept in that same room,
which contained a bed, computer, and related office equipment.
Petitioner seeks to deduct one-seventh of the cost of maintaining
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