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Section 280A(c)(1), however, provides a limited exception if "a
portion of the dwelling unit * * * is exclusively used on a
regular basis" as "the principal place of business for any trade
or business of the taxpayer" or "as a place of business which is
used by * * * customers in meeting or dealing with the taxpayer
in the normal course of his trade or business". There is no
evidence that Mr. Stone met with customers in the normal course
of his business at his residence. Accordingly, the only ground
upon which an exception to section 280A(a) could be based is that
the portion of the residence was used exclusively on a regular
basis as the principal place of Mr. Stone's business.
Even if we accept that a portion of petitioners' residence
was used exclusively for business purposes, the Supreme Court's
opinion in Commissioner v. Soliman, 506 U.S. 168, 174 (1993),
makes it clear that that portion of the residence must be "the
most important or significant place for the business". Under
Soliman, we need not decide where the most important or
significant place of business was: we need only determine
whether the dwelling was that place. It is quite obvious that
the so-called home office was not that place. Thus, section
280A(a) disallows any deductions with respect to the home.
4. Cost of Goods Sold
Petitioners were unable to identify any error in
respondent's determination with regard to the cost of goods sold.
We therefore sustain respondent's determination.
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