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other than the $950 earned from his charter activities, received
no nonemployee compensation.
On his 1990 Federal income tax return, petitioner claimed
deductions for IRA contributions of $950 and self-employed health
insurance of $950. On his Schedule C for King International,
petitioner reported gross income of $950 and deducted business
expenses in the aggregate amount of $11,272.26, resulting in a
net loss of $10,322.26. In particular, petitioner claimed
deductions for utilities of $351.22 and "Repairs and maintenance
of office in home" of $161.32, each representing 20 percent of
the total utility and maintenance cost of petitioners' residence.
In the notice of deficiency, respondent determined that
petitioner was not entitled to adjustments to income for an IRA
contribution or health insurance pursuant to the limitations of
sections 219(b) and 162(l)(2)(A), respectively. Respondent also
disallowed the deductions for home office expenses pursuant to
the limitations prescribed by section 280A(c)(5). Respondent
does not dispute that petitioner was engaged in a business for
profit within the meaning of sections 162 and 183, or that he has
substantiated his business expenses. Respondent's determinations
are presumed correct, and petitioner bears the burden of proving
otherwise. Rule 142(a); Welch v. Helvering, 290 U.S. 111 (1933).
We first address whether petitioner is entitled to claim a
deduction for expenses attributable to his home office. Section
280A provides in relevant part:
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