- 16 - On this record, the Court holds that petitioner’s tax home during 1994 was Los Angeles. Petitioners are not entitled to deduct the Los Angeles living expenses of petitioner or expenses for travel between Los Angeles and Memphis during that year.6 Respondent is sustained on this issue. The second issue is whether petitioners are entitled to deductions for home office expenses under section 280A for each of the years at issue. For 1994, 1995, and 1996, petitioners claimed various expenses on Schedule C that petitioners contend were in conjunction with an office petitioner maintained in their personal residence at Memphis. The claimed expenses were: Expense 19941 19952 19963 Insurance $1,111.67 –- $613.73 Telephone 756.48 -- 676.55 Security -- $1,040 137.50 Utilities –- –- 665.19 1 Petitioners deducted 1/3 of their total homeowner’s insurance and 73 percent of their total telephone expenses. 6 To the extent that the per diem amount deducted by petitioners for 1994 ($36 x 344 days = $12,384) exceeded the number of days petitioner was in Los Angeles (344 - 287 = 57 days) and would thus be attributable to other cities, petitioners failed to produce evidence that would satisfy the strict substantiation requirements of sec. 274(d) with respect to these expenses. Additionally, with respect to travel expenses between Los Angeles and Memphis, petitioners failed to produce evidence to satisfy the strict substantiation requirements of sec. 274(d), particularly in connection with the business purpose for such travel. See discussion infra.Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
Last modified: May 25, 2011