Deductions can be substantiated in many different ways depending on expense involved
Article Abstract:
The substantiation requirements for deductions from income for travel and entertainment expenses are discussed. The taxpayer must establish both the amount spent and the basis for the deduction. Adequate evidence of deductions includes the taxpayer's books and records, oral statements by the taxpayer, statements by third parties, and documentation submitted by third parties. The documentation to substantiate travel and entertainment expenses should include the amount, the time and place of the expense, the business purpose of the expense, and the taxpayer's business relationship to the person(s) being entertained. To deduct a bad business debt, the taxpayer must prove that the debt is worthless and that all reasonable means of collecting the debt have been exhausted. The time and amount of any casualty loss must be substantiated before any deduction for casualty loss is allowed; an independent appraisal is usually the strongest form of substantiation in this case.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1988
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New Regulations show how to determine qualified residence interest
Article Abstract:
The rules regarding the deductibility of qualified residence interest, based on the IRS' Proposed and Temporary Regulations, are discussed. Qualified residence interest is limited to the interest on debts taken on to purchase or improve a principle or secondary residence, and to the interest on home equity debt secured by the residence. The residence must contain a sleeping space, a toilet, and cooking facilities. The two methods to determine the amount of qualified residence income are the simplified and exact methods.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1988
User Contributions:
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