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“records” to help a bankruptcy trustee in a lawsuit filed in his
personal capacity and on behalf of a company, of which he was the
chief executive officer. In view of this testimony, the Court
finds that petitioner has not satisfied the exclusive use
requirement since his business areas were used for both personal
and business reasons, they permeated the entire apartment, and
the uses are so intermingled that the Court cannot find that a
specific portion of the apartment was used exclusively for
business purposes. Moreover, merely testifying that “if I lived
there and I worked there and I did business there * * * I must
have had some reasonable expenses” is not sufficient to satisfy
the Code’s substantiation requirements. Accordingly,
respondent’s determination is sustained.4
2. Utilities
Utilities attributable to the taxpayer’s maintenance of a
home office may be deductible as a business expense. See 1.262-
1(b)(3), Income Tax Regs.
4 In view of our disposition of the deductions relating to
petitioner’s business use of his residence, there is no need to
reach the parties’ arguments regarding the issue of whether his
employer had provided petitioner with an office at Cortelco,
which might have precluded the deduction pursuant to Bodzin v.
Commissioner, 509 F.2d 679 (4th Cir. 1975) (distinguishing
between situations where the taxpayer chooses to work from home
and thus the deduction for the business use of the home is not
allowable from the situations where an office is not available or
suitable for the work and the deduction is allowable), revg. 60
T.C. 820 (1973).
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Last modified: March 27, 2008