Charles E. King - Page 3

            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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