Katia V. and Peter Popov - Page 5

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               Mr. Popov took measurements of the apartment and determined            
          that the living room took up 40 percent of the entire apartment             
          space.  The record also includes a rough diagram of the layout of           
          their apartment.  Petitioners claimed a home office deduction for           
          the living room and deducted $3,600 or 40 percent of the rent for           
          the year and $109 or 20 percent of the electricity for the year.            
          There is no dispute as to the cost of the rent or electricity.              
               Section 280A(a) generally disallows a deduction with respect           
          to the use of a taxpayer’s personal residence.  Section                     
          280A(c)(1)(A), however, provides that section 280A(a) shall not             
          apply if a portion of the taxpayer’s personal residence is                  
          exclusively used on a regular basis as the principal place of               
          business for any trade or business of the taxpayer.  The                    
          exclusive use of a portion of a taxpayer’s dwelling unit means              
          that the taxpayer must use a specific part of the dwelling unit             
          solely for the purpose of carrying on his trade or business.                
               We are satisfied that a specific portion of the living room            
          was exclusively used by Mrs. Popov for her practicing and                   
          recording activities during 1993.                                           
               Additionally, we must address the question of whether the              
          home office constitutes Mrs. Popov’s principal place of business.           
          The Supreme Court in Commissioner v. Soliman, 506 U.S. 168                  
          (1993), identified two primary considerations to decide whether             
          an office located within a taxpayer’s dwelling unit is a                    
          taxpayer’s principal place of business:  (1) The relative                   




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