Frederic S. Clayton and Marlene B. Clayton - Page 1

                                        T.C. Memo. 1997-327                                              


                                      UNITED STATES TAX COURT                                            


                FREDERIC S. CLAYTON and MARLENE B. CLAYTON, Petitioners v.                               
                         COMMISSIONER OF INTERNAL REVENUE, Respondent                                    


                  Docket No. 4665-95.               Filed July 21, 1997.                                 


                  Robert S. Grodberg, for petitioners.                                                   
                  Christopher W. Schoen, for respondent.                                                 


                                         MEMORANDUM OPINION                                              

                  HAMBLEN, Judge:  Respondent determined a deficiency in                                 
            petitioners' Federal income tax for taxable year 1985 in the                                 
            amount of $73,068.  By amendment to answer, respondent asserted                              
            an increased deficiency in the amount of $81,211.  Unless                                    
            otherwise indicated, all section references are to the Internal                              






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