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280A(c)(1)(A). In the case of an employee, the exclusive use of a
portion of the dwelling unit must be for the convenience of the
employer. Sec. 280A(c)(1). The determination as to whether a
dwelling unit is the principal place of business of a taxpayer
depends on the particular facts of each case. Commissioner v.
Soliman, 506 U.S. 168, 174-175 (1993).
The facts in this case clearly reveal that petitioners are not
entitled to any home office expense deduction for 1989.
Petitioners have failed to prove that during 1989 petitioner used
his claimed home office exclusively and on a regular basis as his
principal place of business, or as a place of business for meeting
with clients or customers in the normal course of his business.
Nor have petitioners satisfied the convience-of-the-employer
requirement of section 280A(c)(1) for the period during which
petitioner was an employee.
a. Depreciation (Houses)
Petitioners determined that 9.53 percent of their Mission
Viejo and Poway residences was used for business purposes in 1989.
They claimed a $9,135.03 depreciation deduction for direct capital
improvements to their Poway residence. This deduction includes
expenses associated with remodeling the basement for use as
petitioner’s business office.
Petitioners also deducted $1,164.56 (9.53 percent x
$12,219.94) as indirect capital improvements to their Poway
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