Drucker v. Comm'r of Internal Revenue , Docket No. 11463-79.
| Decision Date | 30 September 1982 |
| Docket Number | Docket No. 11463-79. |
| Citation | 79 T.C. 605 |
| Parties | ERNEST DRUCKER, PETITIONER v. COMMISSIONER of INTERNAL REVENUE, RESPONDENT |
| Court | U.S. Tax Court |
OPINION TEXT STARTS HERE
Petitioner was employed as a concert musician with the Metropolitan Opera. The Opera did not provide its concert musicians with an area to use for individual practice but expected them to practice on an individual basis off the premises. Held, under sec. 280A, I.R.C. 1954, a room in petitioner's residence where he spent a part of his workday practicing is not his principal place of business, and he is not entitled to a deduction for the cost of maintaining the room. Richard B. Sherman and Arthur Pelikow, for the petitioner.
Julius Jove, for the respondent.
Respondent determined a deficiency of $321 in petitioner's Federal income tax for 1976 and $265 for 1977. After concessions by the parties, the sole issue remaining for our decision is whether petitioner is entitled to a home office deduction under section 280A, I.R.C. 1954.
Some of the facts have been stipulated and are so found. The stipulation of facts and exhibits attached thereto are incorporated herein by this reference.
Ernest Drucker (petitioner) resided in New York, N.Y., at the time he filed his petition herein. His Federal income tax returns for 1976 and 1977 were filed with the Brookhaven Service Center at Holtsville, N.Y.
During taxable years 1976 and 1977, petitioner was a concert violinist employed by the Metropolitan Opera Association, Inc. (hereinafter the Met), at Lincoln Center, New York, N.Y. As of 1976, petitioner had been a concert violinist for 47 years and had been with the Met for 30 of those 47 years.
Petitioner, as a member of the Metropolitan Opera Orchestra,1 was covered by the terms of union contracts between Local 802, American Federation of Musicians (of which petitioner was a member), and the Met. During 1976 and 1977, petitioner received compensation from the Met in the amounts of $21,537.95 and $20,827.87, respectively. He was compensated by the Met for the following periods:
(a) 3 continuous pre-season rehearsal weeks;
(b) the regular New York season with a duration of no less than 27 weeks;
(c) 49 tour days (in 1976) and 48 tour days (in 1977);
(d) 2 weeks of performances in the New York City parks;
(e) 5 weeks' vacation; and
(f) 5 weeks' supplemental unemployment benefits.
During the preseason rehearsal period, the musicians would rehearse twice a day. The first rehearsal would begin at 10:30 a.m. and end at 1:15 p.m.; the second would begin at 2 p.m. and end at 4:45 p.m. This rehearsal schedule continued for 3 weeks, 5 days a week.
During the New York season, petitioner was required to play at five operatic performances per week. The running time for each performance could vary from 1 hour 36 minutes to 4 hours 55 minutes. Almost all performances during the New York season began at 8 p.m. and, depending upon the opera, ended about 11 p.m. Saturday performances began at about 2 p.m. There was no contractual requirement that the musicians arrive prior to the start of the performance. However, most did so in order to “warm up” or “tune up.” Performances consumed 15 to 16 hours per week. All New York City performances were at Lincoln Center.
In addition to performing, during the New York season, the orchestra musicians were required to rehearse together as a unit at Lincoln Center. As a member of the string section, petitioner was required to participate in these rehearsals for approximately 10 or 11 hours per week. The orchestra rehearsals were either at a rehearsal room “in C level” or “in the pit,” where performances took place. Thus, during the New York season, a member of the string section would spend approximately 26 hours per week at the Metropolitan Opera House at Lincoln Center playing and rehearsing. In addition, the 3 weeks of preseason rehearsals, also at Lincoln Center, consumed about 27 hours 30 minutes per week.
The Met was on tour 49 days in 1976 and 48 days in 1977. While on tour, the musicians generally did not rehearse together as a unit. The orchestra performed at night only, and during the day, the musicians were free to spend their time as they wished.
Immediately following 2 weeks of performances in the parks, the musicians received a 5-week paid vacation. During this period, the musicians were not obligated in any way to the Met and were totally free to do as they wished, including accepting independent employment, without any effect on their compensation. This contrasted with the supplemental unemployment benefits period during which time, if a musician worked independently, the supplemental unemployment benefits to be received as compensation would be reduced. During the summers of 1976 and 1977, petitioner performed for a period of 49 days each summer for the Chautauqua Institution located in Chautauqua, N.Y. For his services as a concert violinist, petitioner received compensation from Chautauqua of $3,564.75 in 1976 and $3,547.13 in 1977. The record does not disclose any other facts as to the nature of the relationship between petitioner and the Chautauqua Institution.
As a professional musician, petitioner was required to practice numerous hours in order to maintain, refine, and perfect his skill. Petitioner practices the opera in current production as well as the one in preparation. He begins his individual practice with scales and warmup exercises. He spends considerable time on difficult technical passages, practicing those passages of the opera over and over. Rehearsals at the Met involved the entire 93-piece orchestra, differing from a performance principally due to the absence of an audience. Petitioner's parts have to be perfected prior to a rehearsal or performance, since every error can be detected by his colleagues and his conductor. An error can distract other members of the orchestra, and has the potential to disrupt the entire orchestra.
The Metropolitan Opera House at Lincoln Center does not have private studios for practice on an individual basis by the 93 members of the orchestra. Neither did the Met otherwise provide petitioner with a facility for private practice. Orchestra employees were expected to practice individually, off the premises. Practice was necessary as a practical matter in order for petitioner to carry out his obligations to the Met. Such off-premises practice, while a practical necessity for the orchestra employees, was not requested by the employer and was not a requirement or condition of employment.2 The musicians (including petitioner) were not required to report to the Met on their practice at home. By contrast, missing a rehearsal or a performance was investigated and usually would result in a loss of pay, unless there was a legitimate reason for the absence.
During 1976 and 1977, petitioner, a widower, lived alone in a five-room apartment in New York City. One room was set aside for exclusive use as a studio. The room or studio was furnished with stereo components, record equipment, a piano, hundreds of books, records and tapes, musical scores, music stands, a desk, and three violins. Petitioner used the studio for approximately 30 hours per week while in New York City, and his work there included practice of his musical skills, review of musical scores, and rehearsal of his numerous operatic numbers. The room was used exclusively for such purposes; it was not used for social or personal purposes.
Petitioner deducted $461 on both his 1976 and 1977 returns for expenses attributable to a home office (his studio). He now contends that instead of the $461 studio deduction claimed on his 1976 return, he is entitled to deduct $745, computed as follows:
Similarly, petitioner now contends that instead of the $461 studio deduction claimed on his 1977 return, he is entitled to deduct $748.40, computed as follows:
OPINIONSection 280A limits the deductions for expenses in the home for taxable years beginning after December 31, 1975.3 Section 280A(a) provides generally that “no deduction* * * 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.”4 Section 280A(c)(1), as recently amended, sets forth an exception to this general disallowance5 by providing that:
(B) as a place of business which is used by patients, clients, or customers in meeting or dealing with the taxpayer in the normal course of his trade or business, or
(C) in the case of a separate structure which is not attached to the dwelling unit, in connection with the taxpayer's trade or business.
In the case of an employee, the preceding sentence shall apply only if the exclusive use referred to in the preceding sentence is for the convenience of his employer.
However, for a use described in section 280A(c)(1) a...
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