Paul M. and June S. Sengpiehl - Page 11

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               Petitioner testified that Mrs. Sengpiehl was available to              
          serve his clients refreshments.  One of petitioner's clients                
          testified that she made phone calls from the kitchen.  Petitioner           
          also testified that his family would get coffee from the kitchen            
          and that dinner was eaten in half of the kitchen.                           
               Petitioners have not established that any part of the                  
          kitchen was used exclusively in petitioner's business.                      
          Petitioners are not entitled to a deduction for the expenses                
          allocable to the kitchen.                                                   
               Petitioners argue that petitioner's home office included the           
          bathroom.  Respondent counters that petitioners used the bathroom           
          for personal purposes and have failed to meet the requirements of           
          section 280A(c).  We agree with respondent.                                 
               Petitioner testified that the bathroom was available for his           
          clients' use, and that his children were not present in the house           
          during the normal business hours of his law practice.                       
          Petitioners have failed to establish that the bathroom was                  
          exclusively used for business purposes, and no deduction may be             
          allowed with respect to this portion of the house.                          
               Petitioners contend that petitioner's home office includes a           
          portion of their basement used by petitioner for storage of legal           
          materials.  Respondent argues that petitioners are not entitled             
          to a deduction for the storage space under section 280A(c)(2).              
          Petitioners argue that respondent raised this issue initially on            






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Last modified: May 25, 2011