Anand K. Verma - Page 13




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          Commissioner, 110 T.C. 402, 422 (1998); sec. 1.248-1(b)(2),                 
          Income Tax Regs.  Generally, expenditures incurred in connection            
          with organizing a business are not currently deductible.  See               
          INDOPCO, Inc. v. Commissioner, supra at 89-90; E.I. du Pont de              
          Nemours & Co. v. United States, 432 F.2d 1052, 1058 (3d Cir.                
          1970); Skaggs Cos. v. Commissioner, 59 T.C. 201, 206 (1972).                
          Therefore, petitioner is not entitled to currently deduct the               
          fees paid to Maryland in connection with the  incorporation of              
          Export.                                                                     
               5.  Business Use of the Home                                           
               Generally, an individual taxpayer may not deduct expenses              
          arising from the use of a dwelling unit which the taxpayer uses             
          as a residence.  See sec. 280A(a).  The general rule does not               
          apply where the taxpayer uses a portion of the residence                    
          exclusively and regularly as the principal place of business for            
          a trade or business of the taxpayer or as a place of business               
          which the taxpayer uses to see clients or customers, or hold                
          meetings in the normal course of his trade or business.  See sec.           
          280A(c)(1)(A) and (B).3                                                     
               Petitioner and his wife resided in a one-bedroom apartment.            
          Petitioner claims that he ran his business in his living room,              
          devoting 500 of the apartment’s 880 square feet to Export.                  



               3    The exception provided in sec. 280A(c)(1)(C) is                   
          inapplicable, as petitioner resided in an apartment.                        





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