A taxpayer whose principal place of business is located in his residence may deduct the cost of all of his local transportation costs relating to his business. 349 This rule applies even if the business is not the taxpayer's sole source of income, as long as the taxpayer's residence is the principal location for the taxpayer's secondary business. 350 A taxpayer whose primary business is located outside his home cannot deduct his transportation costs between his principal business site and the home business site because the taxpayer is presumed to simply want to go home. 351

/Footnote/ 349 Wisconsin Psychiatric Services, Ltd. v. Comr., 76 T.C. 839 (1981).

/Footnote/ 350 Curphey v. Comr., 73 T.C. 766 (1980).

/Footnote/ 351 Lary v. U.S., 608 F. Supp. 258 (N.D. Ala. 1985), aff'd, 787 F.2d 1538 (11th Cir. 1986); Hamblen v. Comr., 78 T.C. 53 (1982).

Example—Home is Principal Business Location (1)

A is a doctor employed full-time at a hospital. A also owns six rental properties which he manages himself from a home office. The local transportation costs A incurs in visiting his rental properties from his home office are deductible expenses of his rental property business. A cannot deduct the costs of transportation between the hospital and his home because these are commuting costs, notwithstanding his secondary business at home. 352

/Footnote/ 352 Curphey v. Comr., 73 T.C. 766 (1980).

Example—Home is Principal Business Location (2)

B, a dog trainer, sometimes trains dogs at their owners' residences, but also trains dogs at her own residence. B manages the business from a home office. B may deduct all of the local transportation costs connected with the business since she has no commuting costs. 353