-30-
have been calculated by using the amounts shown on the Forms W-2,
Wage and Tax Statement; in other words, the amount for each year
that equals their reported gross wages less the sum of the
reported amounts withheld for Federal income tax, Social Security
tax, and Medicare tax. We conclude differently. The bank
deposits analyses correctly reflect only the portion of his wages
that was deposited into his account (i.e., in addition to the
reported amounts of tax withheld, LeBloch apparently had other
amounts taken out of his gross wages before those wages were
deposited into his account). Those amounts are different from
the amounts referenced by petitioners.
C. Home Office Deduction for Each Subject Year
Petitioners are generally precluded from deducting expenses
incurred in connection with the business use of the residence.
See sec. 280A. Pursuant to section 280A(c)(1), however,
petitioners may deduct expenses allocable to a portion of the
residence if that portion was exclusively used on a regular basis
(1) as a principal place of business, (2) as the place for
meeting with customers, clients, or patients in the normal course
of business, or (3) in the case of an unattached separate
structure, in connection with the business.12 See also
12 Sec. 280A(a) also does not apply to items allocable to
space withing a dwelling unit that is used on a regular basis for
the storage of inventory held for use in the taxpayer’s trade or
business of selling products at retail provided the dwelling unit
(continued...)
Page: Previous 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 Next
Last modified: November 10, 2007