Mohan Roy, M.D., Inc. - Page 7

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          petitioners do not indicate that any automobile expenses were               
          claimed for business use.  The record does not reveal whether the           
          Roys were reimbursed by Roy, Inc. for using their personal                  
          automobiles for business use.                                               
               Roy, Inc. reported gross income on Form 1120, U.S. Corporation         
          Income Tax Return, of $2,468,996 for 1991, $1,882,154 for 1992,             
          $1,423,110 for 1993, and $1,430,828 for 1994.  Roy, Inc. paid and           
          deducted automobile expenses (insurance, vehicle registration fees,         
          maintenance and repair expenses, and gasoline) relating to the              
          Rolls Royce as follows:                                                     
                              Year      Automobile Expenses                           
                              1991           $5,157.00                                
                              1992           4,992.80                                 
                              1993           4,546.80                                 
                              1994           4,034.40                                 
          Roy, Inc. reported depreciation expense deductions using the double         
          declining balance method under the Modified Accelerated Cost                
          Recovery System (MACRS) for the Rolls Royce in the following                
          amounts:                                                                    
                              Year      Depreciation Expenses                         
                              1991           $4,200                                   
                              1992           2,550                                    
                              1993           1,475                                    
                              1994           1,475                                    
               The Roys filed jointly and reported adjusted gross income on           
          Form 1040, U.S. Individual Income Tax Return, of $1,397,422 for             
          1991, $906,187 for 1992, $164,377 for 1993, and $503,599 for 1994.          





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