James J. Hogan - Page 3




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               Respondent determined deficiencies of $10,929 and $9,778 in            
          petitioner’s 1996 and 1997 Federal income taxes, respectively.              
          This Court must decide (1) whether petitioner engaged in a bed              
          and breakfast activity for profit within the meaning of section             
          183 and (2) whether petitioner is entitled to head of household             
          filing status.                                                              
               Some of the facts in this case have been stipulated and are            
          so found.  Petitioner resided in Killbuck, New York, at the time            
          he filed his petition.                                                      
               In 1977, petitioner built a house at 6161 Sullivan Hollow,             
          Killbuck, New York, 14748 (Sullivan Hollow residence).  The                 
          Sullivan Hollow residence has six bedrooms, three full baths, a             
          living room, kitchen, dining room, deck, hot tub, and two                   
          satellite television systems.  Petitioner and his then-wife                 
          jointly held title to the Sullivan Hollow residence and lived               
          there with their four children.  Petitioner and his then-wife               
          divorced in 1992.  In 1993, petitioner purchased his former                 
          wife’s interest in the Sullivan Hollow residence.                           
               During the taxable years in issue, petitioner worked full-             
          time as an elementary school principal.  Petitioner’s job as a              
          principal required him to work for 11 months annually.                      
               In 1994, petitioner started what he termed The Camelot Inn             
          Bed & Breakfast (Camelot Inn) at the Sullivan Hollow residence.             
          During 1996 and 1997, petitioner and his then-fianc�, Mary Ann              






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