Jin Xiong - Page 11

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          particular trade, business, or industry.  Deputy v. du Pont, 308            
          U.S. 488, 495 (1940).  An expense is considered necessary if it             
          is appropriate or helpful for the development of the business.              
          Commissioner v. Heininger, 320 U.S. 467, 471 (1943).  Personal,             
          living, or family expenses, on the other hand, are generally not            
          deductible.  Sec. 262.  If a taxpayer establishes that he or she            
          paid or incurred a deductible business expense but does not                 
          establish the amount of the deduction, we may approximate the               
          amount of the allowable deduction, but we bear heavily against              
          the taxpayer whose inexactitude is of his or her own making.                
          Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930).  For            
          the Cohan rule to apply, however, a basis must exist on which               
          this Court can make an approximation.  Vanicek v. Commissioner,             
          85 T.C. 731, 742-743 (1985).  Without such a basis, any allowance           
          would amount to unguided largesse.  Williams v. United States,              
          245 F.2d 559, 560 (5th Cir. 1957).                                          
               In the case of expenses paid or incurred with respect to               
          travel and certain listed property, section 274 overrides the               
          Cohan rule, and those expenses are deductible only if the                   
          taxpayer meets the stringent substantiation requirements of                 
          section 274(d).  See sec. 280F(d)(4)(A); Sanford v. Commissioner,           
          50 T.C. 823, 827 (1968), affd. per curiam 412 F.2d 201 (2d Cir.             
          1969).  For these expenses, only certain types of documentary               
          evidence will suffice.  Passenger automobiles are listed property           

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