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therefore, we are confident that the cost of insurance on the
pickup truck was at least $19.16 per month in 2002. Consequently,
we will allow an insurance expense deduction for Robco vehicles of
$459.84, consisting of $19.16 per vehicle per month.
In addition to depreciation and insurance expenses for Robco
vehicles, petitioners claimed a $1,708 deduction for car and truck
expenses. In the case of traveling expenses and certain other
expenses, such as entertainment, gifts, and expenses relating to
the use of listed properties, including passenger vehicles and
other property used as a means of transportation, computers, and
cellular phones under section 280F(d)(4)(A), section 274(d)
imposes stringent substantiation requirements to document
particularly the nature and amount of such expenses. For such
expenses, substantiation of the amounts claimed by adequate
records or by other sufficient evidence corroborating the claimed
expenses is required. Sec. 274(d); sec. 1.274-5T(a), Temporary
Income Tax Regs., supra. To meet the adequate records
requirements of section 274(d), a taxpayer “shall maintain an
account book, diary, log, statement of expense, trip sheets, or
similar record * * * and documentary evidence * * * which, in
combination, are sufficient to establish each element of an
expenditure”. Sec. 1.274-5T(c)(2)(i), Temporary Income Tax Regs.,
50 Fed. Reg. 46017 (Nov. 6, 1985). These substantiation
requirements are designed to encourage taxpayers to maintain
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Last modified: November 10, 2007