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fully set forth above, petitioner was not an independent
contractor but rather a common-law employee. Thus, he is not
entitled to an adjustment for cost of goods sold. Even if
petitioner were entitled to Schedule C treatment for income and
expenses, petitioner failed to produce any evidence of the cost
of goods sold in 1996 or 1997. See Gibbs v. Commissioner, T.C.
Memo. 1988-491. Further, petitioner did not purchase the goods
from IBC that IBC sold to its customers, and the amount listed as
cost of goods sold was merely an industry average of stale and
damaged returns. Therefore, we hold for respondent.
3. Home Office Deduction
Section 280A(a) provides that an individual taxpayer is
generally not entitled to a deduction for a dwelling unit used by
the taxpayer as a residence during the taxable year. Section
280A(c)(1), however, permits a deduction of expenses allocable to
a portion of the dwelling unit which is regularly and exclusively
used as either the principal place of business for any trade or
business of the taxpayer or as a place of business which is used
by clients or customers in meeting or dealing with the taxpayer
in the normal course of his trade or business.
An employee is entitled to the deduction only if the office
is for the convenience of the employer. See sec. 280A(c)(1).
This use has been found where the employee is required to
maintain the office as a condition of employment or when the home
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