                   T.C. Summary Opinion 2004-3



                     UNITED STATES TAX COURT



    STEPHAN BARTSCH AND EVA BARTSCH, a.k.a. EVA POTT BARTSCH,
                          Petitioners v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 18872-02S.               Filed January 20, 2004.


     Stephan Bartsch, pro se.

     Margaret S. Rigg, for respondent.




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

the provisions of section 7463 of the Internal Revenue Code in

effect at the time that the petition was filed.1   The decision to




     1
        Unless otherwise indicated, all subsequent section
references are to the Internal Revenue Code in effect for 1999,
the taxable year in issue, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
                               - 2 -

be entered is not reviewable by any other court, and this opinion

should not be cited as authority.

     Respondent determined a deficiency in petitioners’ Federal

income tax for the taxable year 1999 in the amount of $1,549.

     After a concession by respondent,2 the sole issue for

decision is whether petitioners are entitled to a moving expense

deduction in excess of the amount allowed by respondent.     We hold

that they are to the extent provided herein.

Background

     Some of the facts have been stipulated, and they are so

found.   Petitioners resided in Berkeley, California, at the time

that their petition was filed with the Court.

     Stephan Bartsch (petitioner) and Eva Bartsch3 (Mrs. Bartsch)

are a married couple.   Petitioner is a citizen of Switzerland.

Mrs. Bartsch is a citizen of Germany.   Before 1997, petitioner

and Mrs. Bartsch lived in a rented apartment in Zurich,

Switzerland.

     In 1997, petitioner earned a Ph.D. degree in molecular


     2
        Respondent concedes that petitioners are entitled to a
lifetime learning credit under sec. 25A based on a payment in the
amount of $9,125.
     3
        Petitioner Eva Bartsch did not appear at trial and did
not execute the stipulation of facts. Accordingly, the Court
will dismiss this action as to her. See Rule 123(b). However,
decision will be entered against petitioner Eva Bartsch
consistent with the decision entered against petitioner Stephan
Bartsch as to the deficiency in tax.
                                - 3 -

biology and genetics from a university in Zurich.    During that

time, Mrs. Bartsch attended medical school at the University of

Zurich.

     On March 14, 1997, after completing his Ph.D. degree,

petitioner came to the United States from Zurich to work as a

postdoctoral research scientist at Columbia University in New

York City.    Petitioner entered the United States on a J-1 visa.

Petitioner’s job at Columbia University was indefinite in

duration.    Petitioner lived in an apartment while in New York

City.

     While petitioner lived and worked in New York City, Mrs.

Bartsch remained in Zurich and continued to attend classes at the

University of Zurich.    Mrs. Bartsch visited petitioner on several

occasions while he lived in New York City.

     In 1999, Mrs. Bartsch was accepted into a clinical residency

program beginning in June 1999 at Stanford University in Palo

Alto, California.    Mrs. Bartsch incurred tuition expenses in the

amount of $9,125 for the clinical residency program.    As a result

of Mrs. Bartsch’s residency at Stanford University, petitioner

accepted a position as a research associate at the University of

California in Berkeley, California.

     Before June 2, 1999, petitioner traveled to Zurich to assist

Mrs. Bartsch with her move to the United States. Petitioner and

Mrs. Bartsch rented a truck and moved most of their household
                                 - 4 -

goods and personal effects from their Zurich apartment into a

storage facility in Saigans, Switzerland.

     On June 2, 1999, petitioner and Mrs. Bartsch flew from

Zurich to New York City.   Mrs. Bartsch entered the United States

on a J-2 visa.   Petitioner and Mrs. Bartsch brought some personal

effects with them from Zurich.    Petitioner and Mrs. Bartsch then

packed their possessions in the New York City apartment and the

items brought from Zurich.

     On June 9, 1999, petitioner and Mrs. Bartsch flew from New

York City to San Francisco.   At that time, a professional moving

company moved by truck 20 boxes of household goods and personal

effects from petitioner’s New York City apartment to Berkeley.

     During the move to Berkeley, the moving company lost one of

petitioner’s boxes.   According to petitioner, the box contained

in-line skates and outdoor gear.    Petitioner filed a claim with

the moving company in the amount of $2,350.   The moving company

denied petitioner’s claim.

     On June 16, 1999, petitioner entered into a rental agreement

for storage space with AAAAA Rent-A-Space (AAAAA Storage) in

Berkeley.   Petitioner placed the household goods moved from New

York City into storage for a short time.    Petitioner incurred a

monthly storage expense in the amount of $79.

     Petitioner and Mrs. Bartsch jointly filed a Form 1040, U.S.

Individual Income Tax Return, for 1999.    The income reported on
                               - 5 -

the 1999 return consisted solely of wages earned by petitioner in

the amount of $23,964.   Petitioner claimed a moving expense

deduction in the amount of $8,298 on the 1999 return.

Petitioner’s moving expense deduction included the cost of moving

the household goods and personal effects from New York City to

Berkeley, the cost of moving household goods from Zurich to

Saigans, the cost of petitioner’s travel from Zurich to San

Francisco, the cost of Mrs. Bartsch’s travel from Zurich to San

Francisco, the costs of storage in both Saigans and Berkeley, and

the cost or value of the contents of the box lost by the moving

company.

     In the notice of deficiency, respondent allowed petitioners

a moving expense deduction of $955.    Respondent contends that

petitioners are not entitled to a moving expense deduction in any

amount greater than that allowed by respondent.

Discussion

     In general, the determinations of the Commissioner in a

notice of deficiency are presumed correct, and the burden is on

the taxpayer to show that the determinations are incorrect.    See

Rule 142(a); INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84

(1992); Welch v. Helvering, 290 U.S. 111, 115 (1933).4


     4
        Sec. 7491 does not apply in this case to shift the burden
of proof to respondent if for no other reason than that
petitioner failed to establish that he fully complied with the
substantiation requirements of sec. 7491(a)(2)(A).
                                - 6 -

     Deductions are strictly a matter of legislative grace, and a

taxpayer bears the burden of proving his or her entitlement to

the claimed deductions.    Rule 142(a)(1); see New Colonial Ice Co.

v. Helvering, 292 U.S. 435, 440 (1934); Welch v. Helvering,

supra; cf. sec. 7491(a)(2).    Taxpayers are required to maintain

records sufficient to substantiate their claimed deductions.     See

sec. 6001; sec. 1.6001-1(a), Income Tax Regs.    This includes the

burden of substantiating the amount and purpose of the items

claimed.    See sec. 6001; sec. 1.6001-1(a), Income Tax Regs.   If

claimed deductions are not adequately substantiated, we may

estimate them, provided we are convinced that the taxpayer

incurred such expenses and we have a basis upon which to make an

estimate.   Cohan v. Commissioner, 39 F.2d 540 (2d Cir. 1930);

Vanicek v. Commissioner, 85 T.C. 731, 743 (1985).    Without such a

basis, any allowance would amount to unguided largesse.     Williams

v. United States, 245 F.2d 559, 560 (5th Cir. 1957).

     Section 217(a) provides a deduction for moving expenses paid

or incurred during the taxable year in connection with the

commencement of work by the taxpayer as an employee at a new

principal place of work.

     Deductible moving expenses under section 217(a) include only

the reasonable costs:   (1) Of moving a taxpayer’s household goods

and personal effects from the former residence to the new
                                   - 7 -

residence; and (2) of traveling, including lodging, from the

former residence to the new place of residence.        Sec. 217(b)(1).

     A.     Cost of Moving Household Goods From Zurich to Saigans

     For purposes of section 217, “former residence” refers to

the taxpayer’s principal residence before his departure for his

new principal place of work.       Sec. 1.217-2(b)(8), Income Tax

Regs.     Principal residence does not include other residences

owned or maintained by the taxpayer or members of the taxpayer’s

family.     Id.   Whether property is used by the taxpayer as his

principal residence depends upon all the facts and circumstances

in each case.      Id.

     Before his June 1999 move to Berkeley, petitioner lived in

New York City.     Petitioner had lived and worked in New York City

since completing his Ph.D. degree in 1997.        Additionally,

petitioner’s employment at Columbia University was not a

temporary position.       On the basis of the record, we find that

petitioner’s former residence before his move to Berkeley was New

York City, not Zurich.       Therefore, we hold that petitioner is not

entitled to deduct the cost of moving any household goods from

Zurich to Saigans.       See sec. 217(b)(1)(A).

     B.     Petitioner’s Cost of Traveling From Zurich to San
            Francisco

     The travel cost from the former residence to the new place

of residence is a deductible moving expense.        See sec.

217(b)(1)(B).
                                - 8 -

     As discussed above, petitioner’s former residence for

purposes of section 217 was New York City.    Therefore, we hold

that petitioner is not entitled to deduct his travel expenses

from Zurich to San Francisco.   See sec. 217(b)(1)(B).5

     C.   Cost of Travel for Mrs. Bartsch from Switzerland to
          San Francisco

     Mrs. Bartsch moved to Berkeley to enroll in a clinical

residency program at Stanford University.    Mrs. Bartsch did not

move to Berkeley in connection with the commencement of work as

an employee.   Accordingly, Mrs. Bartsch’s travel cost from Zurich

to San Francisco is not deductible under section 217(a).

     In addition, section 217(b)(2) provides that a taxpayer may

deduct the expenses incurred in moving a member of the taxpayer’s

household if such individual has both the former residence and

the new residence as his principal place of abode.    See also sec.

1.217-2(b)(10)(i), Income Tax Regs.     A member of the taxpayer’s

household includes any individual residing at the taxpayer’s

residence who is neither a tenant nor an employee of the



     5
        Although petitioner’s travel expenses from New York City
to San Francisco might otherwise be a deductible expense under
sec. 217(b)(1)(B), petitioner has failed to substantiate such an
expense. Petitioner offered no documentary evidence, such as a
canceled check, receipt, credit card statement, or airline
ticket, nor does the record negate the possibility that some
portion of petitioner’s travel expenses might have been subject
to reimbursement. Accordingly, we decline to invoke the rule in
Cohan v. Commissioner, 39 F.2d 540 (2d Cir. 1930), to estimate
the travel expense to which petitioner might be entitled because
the record provides no basis for making such an estimate.
                                 - 9 -

taxpayer.   Id.    In Paguio v. Commissioner, T.C. Memo. 1981-2, the

cost of transporting the taxpayer’s two children from the

Philippines to the United States was not a deductible moving

expense under section 217(a) because before their move the two

children did not share the taxpayer’s former residence in the

United States as their principal place of abode.

     Mrs. Bartsch lived in Zurich when petitioner moved to New

York City in 1997.    Mrs. Bartsch continued to live and attend

school in Zurich until petitioner moved to Berkeley in June 1999.

Although Mrs. Bartsch visited petitioner while he lived in New

York City, she did not make petitioner’s residence in New York

City her principal place of abode before petitioner’s move to

Berkeley.   Therefore, petitioner is not entitled to a moving

expense deduction under section 217(a) for Mrs. Bartsch’s travel

cost from Zurich to San Francisco.

     D.   Storage Costs

     Expenses of moving household goods and personal effects

include the costs of in-transit storage.      Sec. 1.217-2(b)(3),

Income Tax Regs.    Storage expenses are in-transit if they are

incurred within any consecutive 30-day period after the day such

goods are moved from the taxpayer’s former residence and prior to

delivery at the taxpayer’s new residence.       Id.

     The storage cost in Saigans was not incurred within the

applicable 30-day period.    See id.     Additionally, the storage
                               - 10 -

cost in Saigans was not incurred as petitioner’s goods were moved

between New York City, petitioner’s former residence, and

Berkeley, petitioner’s new residence.    Therefore, the storage

cost incurred by petitioner in Saigans was not incurred in

transit during petitioner’s move from New York City to Berkeley.

Accordingly, the Saigans storage cost is not a deductible moving

expense for purposes of section 217(a).

     However, petitioner’s AAAAA Storage expense was incurred

during the 30-day period after the goods were moved from

petitioner’s former residence, New York City, and before delivery

at petitioner’s new residence, Berkeley.    Accordingly, we hold

that petitioner is entitled to an additional moving expense

deduction under section 217(a) in the amount of $79 for the in-

transit storage expense.

     E.   Cost of Box Lost in Transit

     Petitioner has failed to substantiate the claimed loss of

$2,350 with respect to the box lost in transit from New York City

to Berkeley.    Petitioner did not offer any evidence other than

his testimony with respect to the cost or value of the contents

of the box.    There is no basis in the record for the Court to

estimate such an expense under the Cohan rule.    As such, we need

not decide whether the value of the box that petitioner claims

was lost by the moving company is a deductible moving expense for

purposes of section 217.    Accordingly, we hold that petitioner is
                             - 11 -

not entitled to a moving expense deduction for the box lost while

in transit.

     F.   Conclusion

     We hold that petitioner is entitled to an additional moving

expense deduction in the amount of $79.

     We have considered all of the other arguments made by the

parties and, to the extent that we have not specifically

addressed them, we find them to be without merit and/or

irrelevant.

     Reviewed and adopted as the report of the Small Tax Case

Division.

     To reflect the foregoing,

                                          An order of dismissal as

                                   to petitioner Eva Bartsch will

                                   be entered, and decision will

                                   be entered under Rule 155.
