                          T.C. Memo. 1999-148



                        UNITED STATES TAX COURT



            JOHN A. AND MARGARET R. GOSLING, Petitioners v.
              COMMISSIONER OF INTERNAL REVENUE, Respondent



        Docket No. 22586-97.             Filed May 3, 1999.




        John A. Gosling, pro se.

        Ross M. Greenberg, for respondent.



                MEMORANDUM FINDINGS OF FACT AND OPINION


        ARMEN, Special Trial Judge:   This case was heard pursuant to

the provisions of section 7443A(b)(3) and Rules 180, 181, and

182.1


        1
       Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the taxable years in
                                                   (continued...)
                               - 2 -


     Respondent determined deficiencies in petitioners' Federal

income taxes for the taxable years 1993 and 1994 in the amounts

of $3,942 and $2,725, respectively.

     After concessions by petitioners,2 the issue for decision is

whether petitioners are entitled to certain deductions.     Our

disposition of this issue will depend upon whether petitioner

husband's home office constitutes his principal place of

business.   We hold that petitioner husband's home office was his

principal place of business and that petitioners are therefore

entitled to the deductions at issue herein.

                         FINDINGS OF FACT

     Some of the facts have been stipulated, and are so found.

Petitioners resided in Savannah, Georgia, at the time that their

petition was filed with the Court.




     1
      (...continued)
issue, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
     2
        Petitioners concede that they are not entitled to
deductions for the following expenses:

     Expense claimed            1993           1994

     Advertising                 $100           $108
     Office                       485            --
     Travel                     6,475          6,960
     Other expenses               271            335
     Insurance                  1,897            705
                               - 3 -


     During the years in issue, petitioner husband (petitioner)

was primarily employed as the music director of the Hilton Head

Orchestra, a community orchestra, and the Hilton Head Choral

Society (collectively, Hilton Head).   As a music director,

petitioner rendered services in a number of capacities: as a

conductor, as an organizer or producer, and as an impresario.

During that same year, petitioner was also employed as the choir

conductor for the First Presbyterian Church, and as an adjunct

professor of music at the University of South Carolina, Hilton

Head branch.   For a brief period during 1993, petitioner was

employed as the principal guest conductor of the Savannah

Orchestra.   None of the various entities that employed petitioner

provided him with an office.

     Petitioners reside in a four bedroom single-family home.

Throughout the years in issue, the fourth bedroom of petitioners'

house was used exclusively by petitioner as a home office.    The

room was set up as a typical office, containing a desk, shelving,

a computer, filing cabinets, and other office equipment used by

petitioner to perform business-related duties.

     Petitioner spent the majority of his working hours at his

home office.   Part of that time he performed duties related to

his position as a conductor.   An important aspect of petitioner's

job as a conductor was to select the repertoire for each concert.

Selecting the repertoire was a time consuming process, and
                               - 4 -


petitioner spent much time at his home office performing that

duty.   Petitioner also spent time preparing for concerts by

studying scores, researching the composer and musical epoch, and

evaluating the caliber of individual participating musicians.

     Petitioner also used his home office to perform duties that

related to his position as an organizer for Hilton Head.    In that

capacity, he was both a manager as well as an administrator.

Petitioner used his home office to negotiate contracts for future

engagements, prepare schedules for upcoming events, reserve

facilities, and obtain licensing rights.   Petitioner also spent a

substantial amount of time on the phone coordinating the hiring

of musicians and the procurement of instruments.    Further, he

used his home office to prepare promotional literature for

upcoming concerts and to write short story books which he

utilized in conjunction with children's concerts.    Also at the

home office, petitioner met with new musicians, counseled

performers, and held minor rehearsals.

     Further, an important aspect of petitioner's role as a music

director was to act as the impresario, responsible for attracting

talented and well known soloists to perform at Hilton Head.

Petitioner used his home office to establish and maintain contact

with such performers.   Almost all of petitioner's efforts in this

regard were carried out from his home office.
                                - 5 -


     A smaller portion of petitioner's time was spent at the

Hilton Head concert hall rehearsing performances and conducting

concerts.    Petitioner traveled about 120 miles (round trip) to

perform these duties at the Hilton Head concert hall.

     On petitioners' returns for 1993 and 1994, petitioners

claimed home office expense deductions in the amounts of $1,094

and $1,106, respectively.3   Petitioners also claimed car and

truck expense deductions in the amounts of $6,720 for 1993 and

$6,000 for 1994.4

                               OPINION

     Section 162(a) allows a deduction for the ordinary and

necessary expenses paid or incurred during the taxable year in

carrying on a trade or business.

     Section 280A(a) provides that in the case of a taxpayer who

is an individual, no deduction otherwise allowable under chapter

1 of the Internal Revenue Code (relating to normal taxes and

surtaxes) shall be allowed with respect to the use of a dwelling

unit which is used by the taxpayer during the taxable year as a

residence.   Section 280A(c) provides for exceptions to the

general rule of section 280A(a).   As pertinent herein, section


     3
        Respondent concedes that there is no issue as to
substantiation and does not contend that the ratio of expenses
allocated to the home office exceeds the proper allocation.
     4
        Similarly, respondent concedes that these expenses have
been substantiated.
                               - 6 -


280A(a) shall not apply to any item to the extent that such item

is allocable to a portion of the dwelling unit which is

exclusively used on a regular basis as the principal place of

business for any trade or business of the taxpayer.    See sec.

280A(c)(1)(A).   Petitioners are therefore entitled to the home

office deduction only if the home office was exclusively used on

a regular basis as the principal place of petitioner's business.

     Similarly, petitioners' entitlement to the car and truck

expense is also dependent upon petitioner's home office's meeting

the requirements of section 280A(c)(1)(A).    The commuting expense

from a taxpayer's home to his regular place of business is

generally a nondeductible expense.     See sec. 1.162-2(e), Income

Tax Regs.   By contrast, expense of travel between a taxpayer's

home office and another place of business is not commuting

expense and is deductible under section 162(a), if the home

office is the taxpayer's principal place of business within the

meaning of section 280A(c)(1)(A).    See Curphey v. Commissioner,

73 T.C. 766, 777-778 (1980).

     We have found that petitioner's home office was used

exclusively and regularly in petitioner's business.    We now

consider whether petitioner's home office was his principal place

of business.

     In Commissioner v. Soliman, 506 U.S. 168 (1993), the Supreme

Court identified two primary factors to be considered in deciding
                                - 7 -


whether a home office is the taxpayer's principal place of

business: (1) The relative importance of the activities performed

at each business location, and (2) the time spent at each place.

See id. at 175.   The relative importance of the activities

performed at each business location is to be determined by the

basic characteristics of the taxpayer's particular business.    The

point where goods and services are delivered must be given great

weight in determining the place where the most important

functions are performed.   See id.

     We think that the importance of the activities performed at

petitioner's home office and the amount of time spent on such

activities support the conclusion that petitioner's home office

was his principal place of business.    In so concluding, we rely

heavily on the fact that petitioner was not only a conductor but

rendered services in a number of other capacities.   In those

other capacities, petitioner's most important functions were

performed at his home office.   Cf. Genck v. Commissioner, T.C.

Memo. 1998-105.

     Petitioner's role as an organizer dictated that he actually

perform, rather than merely prepare for, a substantial amount of

his important duties at the home office.   From his home office,

essentially his center of operations, he carried out his

managerial and administrative duties.   It was there that he

coordinated almost every logistical aspect of an upcoming
                                 - 8 -


concert.   He also performed his duties as Hilton Head's

impresario from that location.    Finally, he performed part of his

duties as a conductor, e.g., selecting the repertoire, at his

home office.   His home office was therefore the point of delivery

of a substantial portion of his services.

     Also important is the fact that petitioner spent the

majority of his working hours at his home office.          This factor

bolsters the conclusion that petitioner's home office was not

just an ancillary place of business, but rather the principal

place of his business.

     Having considered the importance of the activities performed

at petitioner's home office and the amount of time spent on such

activities, we are convinced that petitioner's principal place of

business was his home office.

     In light of the foregoing, we hold that petitioners are

entitled to the deductions for home office and car and truck

expenses at issue herein.

     To reflect our disposition of the disputed issue, as well as

petitioners' concessions,



                                              Decision will be entered

                                         under Rule 155.
