Robert E. and Carloyn S. Holmes - Page 1

                                 T.C. Memo. 1997-401                                  


                               UNITED STATES TAX COURT                                


                   ROBERT E. AND CAROLYN S. HOLMES, Petitioners v.                    
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      


             Docket Nos. 4870-93, 27120-93.    Filed September 10, 1997.              


                  Jeffrey A. DeVree and Elizabeth K. Bransdorfer, for                 
             petitioners.                                                             
                  Terry L. Zabel, for respondent.                                     


                       MEMORANDUM FINDINGS OF FACT AND OPINION                        
                  WHALEN, Judge:  Respondent determined the following                 
             deficiencies in and additions to petitioners' Federal                    
             income tax for the years in issue:                                       








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