William J. Cutts - Page 17

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          the office to fulfill his duties as president of ATV.  We                   
          allocate Mr. Cutts’s first floor office to ATV for business use.            
               We also find the entire first floor and second floor                   
          including the kitchen and dining room were used by ATV for                  
          business use and allocate both floors to ATV.                               
               According to Mr. Cutts’s measurements, the four rooms                  
          originally claimed by him for his personal use, not including the           
          additional bathroom and bedroom near the den that we allocated to           
          Mr. Cutts, occupy only 860 square feet out of 3,500 square feet             
          on the third floor.  We find it incredible that the other six               
          rooms on the third floor occupy more than 3 times the space of              
          the four rooms originally claimed by Mr. Cutts.  Petitioners’               
          position becomes completely untenable when we take account of the           
          additional two rooms allocated to Mr. Cutts.                                
               Inasmuch as the record evidence lacks a floor plan of the              
          main house or measurements of any of the other rooms on the third           
          floor, we estimate, applying Cohan v. Commissioner, 39 F.2d 540             
          (2d Cir. 1930), the space Mr. Cutts used on the third floor.  Mr.           
          Cutts used 6 of the 10 rooms on the third floor.  Because two of            
          those rooms were bathrooms that were much smaller than the other            
          rooms, we estimate Mr. Cutts used 47 percent of the third floor,            
          which constitutes roughly 1,645 square feet (.47 x 3,500).                  
          Rounding up, we allocate 13 percent of the main house, carriage             
          house, and pool to Mr. Cutts for his personal use (1,645 square             






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