John C. and Joan F. Stukes - Page 6




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          expenses were incurred, and if so, through substantiation, the              
          amounts paid and hence allowable as deductions.                             
               When a taxpayer establishes that he/she has incurred                   
          deductible expenses but is unable to establish the exact amounts,           
          we can estimate the deductible amounts, but only if the taxpayer            
          presents sufficient evidence to establish a rational basis for              
          making the estimates.  See Cohan v. Commissioner, 39 F.2d 540,              
          543-544 (2d Cir. 1930); Vanicek v. Commissioner, 85 T.C. 731,               
          742-743 (1985).  In estimating the amount allowable, we bear                
          heavily on the taxpayer whose inexactitude in substantiating the            
          amount of the expense is of his own making.  See Cohan v.                   
          Commissioner, supra at 544.  However, without a rational basis              
          for making the estimate, any allowance we make would amount to              
          unguided largesse.  Williams v. United States, 245 F.2d 559, 560-           
          561 (5th Cir. 1957).                                                        
               In the case of expenses paid or incurred with respect to               
          certain listed property, section 274 overrides the Cohan                    
          doctrine, and those expenses are deductible only if the taxpayer            
          meets the stringent substantiation requirements of section                  
          274(d).  Sanford v. Commissioner, 50 T.C. 823, 827-828 (1968),              
          affd. per curiam 412 F.2d 201 (2d Cir. 1969).                               
               Section 274 contemplates that no deduction may be allowed              
          for specified expenses on the basis of any approximation or the             
          unsupported testimony of the taxpayer.  Sec. 1.274-5T(a),                   







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