James M. and Ruth J. Riley - Page 10

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               For each year at issue, petitioner deducted his travel                 
          expenses, including transportation, meals, and lodging, on                  
          Schedules F and E.  He did not keep logs to substantiate dates he           
          was away from home on business or the business purpose of the               
          travel.  He kept some, but not all, of his receipts for his                 
          gasoline, meals, and lodging expenses.  He did not use the                  
          receipts to calculate his travel expenses.  Instead, he used a              
          formula to compute the travel expenses deducted on Schedules E              
          and F each year.                                                            
               Petitioner estimated that he traveled 15,000 miles each year           
          for his rental and farming activities.5  For each year,                     
          petitioner calculated his transportation expense by multiplying             
          15,000 miles by the standard mileage rate for the year ($.345 for           
          2001; $.365 for 2002; and $.36 for 2003).                                   
               Petitioner estimated that he was away from home 40 days each           
          year for rental and farming business.  He calculated his total              
          meals and lodging expenses of $3,600 by multiplying the 40 days             
          by $90, which he believed was the low-cost per diem lodging                 
          expense rate for the years at issue listed in Rev. Proc. 2000-39,           
          2000-2 C.B. 340.                                                            

               5In addition to the 2001 truck, petitioner has three other             
          vehicles that he uses (not exclusively) in his business                     
          activities.  He estimated that he used all four to travel a total           
          of 15,000 miles related to his business activity.                           

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