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carried on a Schedule C business called "Adaptable Business
Concepts" during 1992.
Petitioners claimed a Schedule C deduction for utility
expenses in the total amount of $2,921. In the statutory notice
of deficiency, respondent disallowed the claimed deduction. A
self-prepared statement attached to petitioners' return reveals
that the total amount claimed and disallowed for utility expenses
includes $1,025.30 for "TELEPHONE" and $1,253.70 for "FAX".
Petitioners had two telephone lines at their personal
residence. The first telephone line was used primarily for
personal purposes.3 Petitioner husband alleges that the second
telephone line (line 2) was used only for business purposes.
According to petitioner husband, line 2 was used to make both
telephone calls and facsimile transmissions in connection with
various projects which he worked on during 1992.
Although we believe that petitioner husband used line 2 for
business purposes during 1992, we are not convinced that it was
used exclusively for business purposes. After considering
petitioner husband's testimony and reviewing his telephone
records, we estimate that $250 of the charges for 1992 were
business related. See Cohan v. Commissioner, 39 F.2d 540, 543-
544 (2d Cir. 1930). Petitioners have presented no evidence with
respect to their other claimed utility expenses. Accordingly, we
3 The cost of basic service on the first telephone line
is rendered nondeductible by sec. 262(b).
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