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Temporary Income Tax Regs., 50 Fed. Reg. 46014 (Nov. 6, 1985).
At a minimum, the taxpayer must substantiate: (1) The amount of
the expense; (2) the time and place the expense was incurred; and
(3) the business purpose for which the expense was incurred.
The strict substantiation requirements of section 274 apply
to deductions with respect to “any listed property (as defined in
section 280F(d)(4))”. Section 280F(d)(4)(A)(i), in turn,
includes “passenger automobile” in the definition of listed
property. Further, section 1.274-5T(b)(6)(i)(A), Temporary
Income Tax Regs., 50 Fed. Reg. 46016 (Nov. 6, 1985), includes the
cost of maintenance and repairs for listed property as subject to
the section 274 substantiation rules.
Petitioners claimed automobile expenses of $3,227; these
expenses related to petitioners’ pickup truck. Mr. Stukes
testified that some substantiating documents pertaining to the
automobile mileage were lost when petitioners moved. However, he
introduced a truck mileage log (the mileage log) with 24 entries.
The mileage log, which shows that petitioners drove the truck
6,684 miles for farm-related business, was not prepared
contemporaneously with the incurrence of the claimed expenses but
rather was a reconstruction by petitioners of their use of the
truck. The mileage log shows the date of each use and the
specific destination (such as Home Depot, Wal-Mart, farm
equipment vendors, gas stations, and truck supplies vendors).
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