5
In the notice of deficiency, respondent disallowed $3,357 of
petitioners' home office deduction. The balance was allowed
based upon business usage of the two enclosed porches or 7.15
percent of their home. Respondent allowed petitioners additional
itemized deductions for the portion of the disallowed home office
expense which represents mortgage interest and real estate taxes
in the amount of $2,459. Respondent disallowed petitioners'
other expenses in the amount of $5,518 because petitioners had
not shown that this amount was for ordinary and necessary
business expenses. Respondent further disallowed petitioners'
dependency exemption deduction claimed with respect to their son
Jeffrey because he filed a joint return for the year in issue.
As a computational result of respondent's other adjustments,
respondent disallowed petitioners' claimed earned income credit.
Respondent's determinations are presumed correct, and
petitioners bear the burden of proving them erroneous. Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Further,
deductions are a matter of legislative grace, and petitioners
must prove entitlement to any deductions claimed. INDOPCO, Inc.
v. Commissioner, 503 U.S. 79, 84 (1992).
Schedule C Deductions
A. Home Office Expenses
Section 280A generally prohibits deduction of otherwise
allowable expenses with respect to the use of an individual
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