- 8 -
We begin by noting that petitioners have no records showing
the total amounts paid for utilities. For the 2000 taxable year
they claimed a deduction based on the business use of a portion
of the dwelling and for both years they claimed utility expenses
connected with this use. According to a Form 8829, Expenses for
Business Use of Your Home, included in the 2000 tax return,
petitioner used 14.81 percent of the home exclusively for her Key
Credit business. If this were correct, petitioners’ total
utility bills for 2000 would have been approximately $27,000
($4,000 � .1481). We decline to visit further into this land of
Oz.7 Respondent’s disallowance of the utility expenses is
sustained.
Furthermore, petitioners have not substantiated that
petitioner used a portion of the home exclusively for her
business. Petitioner-husband testified that the home office was
in the living room of the house. But, there is nothing to
indicate that exclusive use of that room was for the Key Credit
business. Petitioners have not shown that the exception to
section 280A(a) applies, and we sustain respondent’s
determination.
The remaining deductions for 1999 and 2000 were for
supplies. Again, petitioners have no receipts or other documents
7 According to petitioners, the utility records could not be
located. We suspect that we know the reason for this.
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