                          T.C. Memo. 1996-364



                        UNITED STATES TAX COURT



            ROBERT D. AND MARIE A. SUCKLEY, Petitioners v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



        Docket No. 14685-95.                    Filed August 8, 1996.



        Robert D. Suckley, pro se.

        Katherine H. Ankeny, for respondent.



                          MEMORANDUM OPINION


        DINAN, Special Trial Judge:   This case was heard pursuant

to the provisions of section 7443A(b)(3) and Rules 180, 181, and

182.1

        1
          Unless otherwise indicated, all section references are
to the Internal Revenue Code in effect for the taxable year in
issue. All Rule references are to the Tax Court Rules of
Practice and Procedure.
                                - 2 -

     Respondent determined a deficiency in petitioner's 1992

Federal income tax in the amount of $1,826.

     After concessions by the parties,2 the issue remaining for

decision is whether petitioners are entitled to claim their

granddaughters, Kathy and Tiffany, and their grandson, Dennis, as

dependents.    Petitioners lived in Phoenix, Arizona, when they

filed their petition.

     Carmen Acosta (Carmen) is the daughter of Maria A. Suckley

and the stepdaughter of Robert D. Suckley.    Carmen is the mother

of five children: Donna, Kathy, Mark, Dennis, and Tiffany.

During 1992, Carmen was a single parent.    She lived in a two-

bedroom apartment with her boyfriend and Donna, Kathy, Dennis,3

and Tiffany.

     Carmen was unemployed during 1992 and received welfare

payments of $489 a month from Aid to Families with Dependent

Children (AFDC).    She also received $372 a month in food stamps.

Carmen testified that her boyfriend, who was employed,

contributed nothing to her household expenses.




     2
          Respondent concedes that (1) petitioners are entitled
to claim their grandson, Mark Acosta, as a dependent and (2)
petitioners are entitled to an earned income credit for Mark.
Petitioners concede that they are not entitled to claim their
granddaughter, Donna Alicea, as a dependent.
     3
          Dennis lived with petitioners for 4-1/2 months during
the summer of 1992.
                                - 3 -

     Robert D. Suckley (petitioner) testified that he supplied

over one-half of the support for Kathy, Mark, Dennis, and Tiffany

during 1992.

     We begin by noting that, as a general rule, the

Commissioner's determinations are presumed correct, and that the

taxpayer bears the burden of proving that those determinations

are erroneous.    Rule 142(a); Welch v. Helvering, 290 U.S. 111,

115 (1933).    Moreover, deductions are a matter of legislative

grace, and the taxpayer bears the burden of proving that he is

entitled to any deduction claimed.      Rule 142(a); New Colonial Ice

Co. v. Helvering, 292 U.S. 435, 440 (1934).     This includes the

burden of substantiation.    Hradesky v. Commissioner, 65 T.C. 87,

90 (1975), affd. per curiam 540 F.2d 821 (5th Cir. 1976).

     Section 151(c)(1) allows individuals an exemption for

dependents as defined in section 152.     Correspondingly, section

152(a)(1) includes a grandchild of the taxpayer as a dependent

provided that the taxpayer supplied over one-half of the support

for such grandchild.

     Section 6001 and the regulations promulgated thereunder

require taxpayers to maintain records sufficient to permit

verification of income and expenses.     As a general rule, if the

evidence at trial demonstrates that the taxpayer has incurred an

expense, but the taxpayer is unable to adequately substantiate

the amount of the expense, the Court may estimate the amount of

such expense and allow any related deduction.      Cohan v.
                               - 4 -

Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930).    However, in

order for the Court to estimate the amount of an expense, we must

have some basis upon which an estimate may be made.   Without such

a basis, any allowance would amount to unguided largesse.

Williams v. United States, 245 F.2d 559, 560 (5th Cir. 1957).

     Petitioner first submits that Carmen's total income for 1992

was $10,332 ($489 per mo. AFDC x 12 = $5,868; $372 per mo. food

stamps x 12 = $4,464; $5,868 + $4,464 = $10,332).

     Petitioner next informs us that petitioners' total household

expenses for 1992 were $4,778.75, and respondent agrees with that

figure.   Petitioners seek to allocate a portion of the household

expense to Kathy, Mark, Dennis, and Tiffany to arrive at the

amount of support they provided for them in 1992.    They may not

allocate any portion of the household expense to Kathy and

Tiffany because they lived with Carmen throughout 1992.

     We have rounded off the monthly household expenses to $400.

There were four people living in the house during the 5 months

that Dennis lived with petitioners; i.e., petitioners, Mark, and

Dennis.   The total amount of household expenses allocable to

Dennis would have been $500 ($400 per mo. divided by 4 people =

$100 x 5 mos. = $500).

     Petitioner then informed us that petitioners spent

approximately $3,789.50 on four of their grandchildren for such

items as clothes, school supplies, birthdays, Christmas presents,

holidays, entertainment, etc. (miscellaneous expenses).   This
                                - 5 -

would result in an expenditure of approximately $947 per child

($3,789.50 divided by 4 = $947).4   None of these claimed expenses

were substantiated.

     Finally, petitioner estimated that petitioners spent

approximately $3,000 for food in 1992.    This would have averaged

out to $250 per month ($3,000 divided by 12 = $250).    Since four

persons were living in petitioners' home during 5 months of 1992,

the average monthly food expense per person for that 5-month

period would have been $62.50 ($250 divided by 4 persons =

$62.50).   Therefore, $312.50 in food expenses would have been

allocable to Dennis for the 5 months that he lived with

petitioners ($62.50 x 5 mos. = $312.50).    From the foregoing

figures submitted by petitioner, it can be seen that, at best,

petitioners supplied the following support to their

grandchildren:

                   Kathy         Mark       Dennis      Tiffany

Misc. expenses     $947        $947.00     $947.00        $947
Household                     1,431.00      500.00
Food                            920.60      312.50

Totals              947       3,298.60    1,759.50          947

     Carmen received a total of $10,332 in welfare payments in

1992.    She testified that she paid no money to petitioners for

Mark's support.



     4
          As noted supra, petitioners have conceded that they may
not claim Donna as a dependent.
                                 - 6 -

     Carmen and her other four children, therefore, each received

$2,066.40 in welfare payments ($10,332 divided by 5 = $2,066.40).

     Petitioners have shown that they supplied over one-half of

Mark's support only, and respondent has conceded that petitioners

may claim him as a dependent.

     Petitioners may not claim any of their other grandchildren

as dependents since they failed to establish that they supplied

over one-half of their support during 1992.

     To reflect the foregoing,

                                         Decision will be entered

                                  under Rule 155.
