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$17,871 that represent unreported gross receipts from her flea
market sales.
II. Taxes and Licenses Expenses Deductions
Tax deductions are a matter of legislative grace with a
taxpayer bearing the burden of proving entitlement to the
deductions claimed. Rule 142(a)(1); INDOPCO, Inc. v.
Commissioner, 503 U.S. 79, 84 (1992).
Under section 162, a taxpayer may deduct all ordinary and
necessary expenses paid or incurred during the taxable year in
carrying on a trade or business, if the taxpayer maintains
sufficient records to substantiate the expenses. Sec. 162(a);
see sec. 6001; Deputy v. du Pont, 308 U.S. 488, 495 (1940).
Taxpayers bear the burden of substantiating the amount and
purpose of any claimed deduction. See Hradesky v. Commissioner,
65 T.C. 87 (1975), affd. per curiam 540 F.2d 821 (5th Cir. 1976).
Petitioner claimed Schedule C deductions of $1,460 for taxes
and licenses expenses. Petitioner failed to provide any
documentation to substantiate that she paid $1,460 for taxes and
licenses in 2002. Therefore, respondent’s determination
disallowing the claimed deductions is sustained.
III. Dependency Exemption
Petitioner claimed a dependency exemption deduction for her
daughter, MA, for 2002. Section 151(c)(1) allows a taxpayer to
claim as a deduction an exemption for each qualifying dependent.
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