George H. Richards - Page 22

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          $2,555 and $683, respectively, for 1997.   Accordingly, the                 
          portions of the mortgage interest and real estate taxes that are            
          allocable to the portion of petitioner’s marital home devoted to            
          his home office during the period from January 1 through July 25,           
          1997, are expenses in connection with the business use of his               
          home and deductible on Schedule C.8                                         
               Petitioner claimed a deduction for utilities as part of his            
          deduction for the business use of his home and also as a separate           
          expense on the Schedule C.  Petitioner failed to explain why he             
          deducted the same item twice or that the items are not, in fact,            
          duplications.  The deduction for utilities is allowed as an                 
          expense with respect to the home office only.                               
               Petitioner has not substantiated his basis in the marital              
          home, the casualty loss, or the insurance.  Accordingly, the home           
          office expense deduction with respect to these items is                     
                    D.  Office Expense, Supplies, Taxes and Licenses,                 
                    Utilities, and Other Expenses                                     
               We are satisfied that petitioner has provided credible                 
          evidence relating to the following CAD drafting expenses:  Office           
          expenses of $57; supplies of $181; taxes and licenses of $90;               

               8  The remaining portion of the mortgage interest and real             
          estate taxes may be deductible by petitioner under sec. 163(h)(3)           
          and sec. 164(a)(1), respectively.                                           

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