- 9 - $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.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011