                     T.C. Summary Opinion 2007-86



                        UNITED STATES TAX COURT



                     BRUCE MILLARD, Petitioner v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



        Docket No. 4971-05S.             Filed May 29, 2007.



        James J. Lombardi III, for petitioner.

     Nina P. Ching, for respondent.



     CARLUZZO, Special Trial Judge:     This case was heard pursuant

to the provisions of section 7463.1    Pursuant to section 7463(b),

the decision to be entered is not reviewable by any other court,

and this opinion shall not be treated as precedent for any other

case.


     1
       Section references are to the Internal Revenue Code of
1986, as amended, in effect for the relevant period. Rule
references are to the Tax Court Rules of Practice and Procedure.
                               - 2 -

     The issue for decision is whether petitioner is entitled to

trade or business expense deductions in excess of the amounts

allowed by respondent.   Agreements between the parties allow

resolution of the issue to depend entirely upon the extent to

which petitioner can substantiate the expenditures that underlie

those deductions.2

                            Background

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

the time the petition was filed, petitioner resided in Jamaica

Plain, Massachusetts.

     During the year in issue, petitioner was employed in various

ways relating to the music industry.     He was self-employed as a

music teacher3 and performance artist.    He also taught students

as an employee for the Brookline Music School (Brookline).    As a

self-employed music teacher, petitioner provided music lessons to

his students (petitioner’s private students) either at a music

studio in Milford, Massachusetts, or at petitioner’s residence.

Music lessons for some of the students that petitioner taught as

an employee of Brookline (Brookline’s students) were conducted




     2
       There are no disputes between the parties regarding the
technical applications of the relevant provisions of the Internal
Revenue Code, including secs. 162, 274, 280A, and 280F.
     3
       Petitioner instructed students learning to play various
stringed instruments, including the guitar and mandolin.
                               - 3 -

either at Brookline’s facility, or as in the case of his private

students, at petitioner’s residence.

     Petitioner also performed roughly four to eight times per

month during 2001, generally at small clubs, but occasionally at

music festivals.   From time to time he was also hired to be a

“side man,” which required that he accompany groups of musicians

on out-of-town trips that often involved overnight stays.

     During 2001, petitioner lived in an old house that had been

converted into several apartments.     Petitioner rents one of the

apartments from the owner of the house and, as relevant here,

during 2001, paid rent and utilities expenses in the amounts of

$16,625 and $1,173, respectively.    Petitioner’s apartment

occupies portions of two levels of the house, and in addition to

hallway spaces, consists of at least six distinct rooms that

spread out over approximately 1,570 square feet.    Petitioner

estimates that at least 776 square feet (49.40 percent of the

apartment) was used exclusively for business purposes.

     Petitioner and his spouse, who is not a party to this

proceeding, filed a timely joint 2001 Federal income tax return

(petitioner’s return).   Petitioner’s return includes a Schedule

A, Itemized Deductions, and a Schedule C, Profit or Loss From

Business.   Expenses attributable to petitioner’s employment with
                                 - 4 -

Brookline are deducted as part of the miscellaneous itemized

deduction claimed on the Schedule A.

     The Schedule C shows petitioner’s “principal business or

profession” as “music performance and production,” and expenses

attributable to petitioner’s various activities as a music

instructor and performing artist, including home office expenses,

are deducted on this schedule.

     In the notice of deficiency that forms the basis for this

case various adjustments, some in petitioner’s favor, are made to

the above-referenced deductions.    There is no point in providing

the detail of those adjustments here because the parties, much to

their credit, have by their agreements moved beyond the disputes

suggested by those adjustments.

                           Discussion

     The extent to which the parties have reached agreement on

many of the adjustments leaves us little to do other than examine

the evidence presented, both in the form of documents and

testimony, in order to determine whether petitioner has properly

substantiated, and is therefore entitled to deductions for

various expenses in excess of the amounts stipulated.

     In so doing, we find that in addition to the amounts

stipulated by the parties, petitioner is entitled to deductions

for the following expenses in the following amounts:    (1) Travel
                                 - 5 -

- $561; (2) items included in the deduction for “other expenses”

- $1,385; and (3) home office - $6,500.

     To reflect the foregoing,



                                         Decision will be entered

                                 under Rule 155.
