In Scott P. Lysford et ux. (T.C. Memo. 2012-41) the taxpayer claimed a deduction for his single engine aircraft he flew between his home and a business office some 200 miles distant.
The Court found the taxpayer's records of the trips in his spiral notebooks wholly inadequate. They merely listed the date and destination of airplane and automobile trips. No business purpose for the trips, no names of clients visited, and no description of business scheduled, conducted, or attempted is provided. A list of dates representing the taxpayer's airplane and automobile trips with no identification of the people visited, the locations visited, the nature or purpose of the trips, or the business actually conducted falls well short of the substantiation required by Section 274(d).
For 2006 the taxpayers failed to show that their business use of the airplane exceeded 50%, and the Court sustained the IRS's determination that the $72,210 in airplane overhaul expenses deducted for 2005 under Section 179 relating to the airplane was subject to recapture. For the same reason, the Court sustained the IRS's disallowance of the taxpayer's $39,000 claimed Section 179 current expenses for 2006 relating to the airplane.
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