Tuesday, December 20, 2011

Basics for Strict Substantiation Requirements for Vehicle, Travel, and Entertainment Deductions:

To substantiate a deduction attributable to listed property a taxpayer must maintain adequate records or present corroborative evidence to show the following: (1) The amount of the expense;(2) the time and place of use of the listed property; and (3) the business purpose of the use (4) the business relationship to the taxpayer of persons entertained or using the property. A contemporaneous log has a high degree of credibility. The log need not duplicate information on receipts so long as the log and receipts complement each other in an orderly manner. Contemporaneous logs are not required, but corroborative evidence to support a taxpayer’s reconstruction of the elements of an expenditure or use must have “a high degree of probative value to elevate such statement” to the level of credibility of a contemporaneous record

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