Michael T. Chappell - Page 5




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          lobbied.  The room contained a copy machine, shelves, a couch,              
          and a large quilting frame.  The small room in the front of the             
          house was a year-round office for tax customers.  Petitioner kept           
          files and computer records in that room.                                    
               During tax season, the medium-sized room adjoining the rear            
          of the large room usually contained three desks and a television.           
          After tax season, the quilters sometimes watched television in              
          the room.  Petitioner also used it as a map and meeting room for            
          his lobbying activities.                                                    
               There is a bedroom next to the room petitioner used as the             
          tax office.  The bedroom is about 100 square feet, and contains a           
          bed, a dresser, mirrors, shelves, closet, and a linen closet.               
          That is the only bed in the house.                                          
               2.   The Creek Drive House                                             
               On October 15, 1992, petitioner and Mrs. Chappell bought a             
          house at 118 Creek Drive (the Creek Drive house) in Montgomery              
          for $144,000.  The Creek Drive house was built in 1992 and has              
          2,505 square feet.  Petitioner paid the mortgage on this house.             
          Mrs. Chappell lived in this house in 1994 and 1995.                         
               One of the rooms in the Creek Drive house was used by                  
          petitioner’s children to do their homework, by Nicole for                   
          tutoring neighbor children in math, and to develop computer                 
          software.  Petitioner called that room the “one-room                        
          schoolhouse”.                                                               






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