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Petitioners have not substantiated that they are entitled to
a depreciation deduction. Further, we are unable to estimate any
amount for depreciation under the Cohan rule because the evidence
petitioners introduced is inadequate. Petitioners are therefore
not entitled to deduct any amount for depreciation.
Expenses Subject to Strict Substantiation Requirements
We now consider those expenses that are subject to the
additional strict substantiation requirements under section
274(d). Expenses subject to strict substantiation may not be
estimated under the Cohan rule. Sanford v. Commissioner, 50 T.C.
at 827.
Cellular Phone Expenses
Petitioners claimed $960 of cellular phone expenses for
2003. Cellular phones are included in the definition of “listed
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 to substantiate the amount of expenses for listed
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).
Petitioners provided copies of their cellular phone bills,
but they failed to establish that they incurred any expenses to
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