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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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