Christopher D. and Kristie M. Farran - Page 20
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property” for purposes of section 274(d)(4) and are thus subject
to the strict substantiation requirements. Gaylord v.
Commissioner, T.C. Memo. 2003-273. A taxpayer must establish the
amount of business use and the amount of total use for the
property. Nitschke v. Commissioner, T.C. Memo. 2000-230; sec.
1.274-5T(b)(6)(i)(B), Temporary Income Tax Regs., 50 Fed. Reg.
46016 (Nov. 6, 1985).
Although the parties stipulated that petitioners paid
$324.42 for cellular phone service during 2003, petitioners did
not prove that NWA required Mr. Farran to have a cellular phone.
Moreover, Mr. Farran also admitted at trial that he used his
cellular phone in 2003 to make personal calls as well as for
business reasons. Petitioners also did not offer any evidence
indicating how much Mr. Farran used his cellular phone in 2003
for business use and how much for personal use. Petitioners
failed to establish that they incurred any expenses to use Mr.
Farran’s cellular phone for business purposes in addition to
those they would have incurred had Mr. Farran used it only for
personal purposes. Petitioners are therefore not entitled to
deduct any cellular phone expenses for 2003.
Petitioners claimed $461 of education mileage expenses for
2003. Education expenses are generally deductible as ordinary
and necessary business expenses if either of two alternative
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Last modified: November 10, 2007