Robert C. and Carol S. Jacobsen - Page 6

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               in the case of an expense which does not exceed an                     
               amount prescribed pursuant to such regulations.  * * *                 
               In support of their claims to deductible car and truck                 
          expenses, petitioners presented a copy of a calendar for 1997,              
          some bills and statements reflecting purchase of gas and rentals            
          of automobiles, bills for insurance on three vehicles, and repair           
          bills.  The calendar showed mileage for the first 3 months of the           
          year.  To support his claim that he engaged in various marketing            
          activities during 1997, Mr. Jacobsen presented copies of                    
          schedules of activities for the years 2000 and 2001 and testified           
          that he engaged in the same type of activity in 1997.                       
          Mr. Jacobsen testified:                                                     
                    THE COURT:  I see your Schedule C reported no                     
               income for 1997 from your real estate business.  Why is                
                    THE WITNESS [Mr. Jacobsen]:  Well, between running                
               between the hospitals and trying to do things and                      
               getting referrals, I had to pass jobs off, or prospects                
               off, and those things fell through most of the time.                   
               It was a tough year.                                                   
                    THE COURT:  Tell me how you used your car again.                  
               I mean how did you come up with the amount that’s                      
               deducted.  $16,507 is a lot of car and truck expense                   
                    THE WITNESS:  I basically lived in my car.                        
                    THE COURT:  Well, you were running to the hospital                
               a lot.  How did you distinguish between hospital runs                  
               and business runs?                                                     
                    THE WITNESS:  Well, logistically I went from my                   
               house to the hospital and then from there on to the                    
               office or beyond, so that that mile was inclusive.                     

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