"PRACTICE" SPACE MAY BE DEDUCTIBLE.

For tax years beginning after 1998, a home office qualifies as "the principal place of business" if a two-part test in IRC Sec. 280A(c)(1) is met.

For prior years, consider the case of Katia Popov--a professional violinist for the Los Angeles Chamber Orchestra and the Long Beach Symphony. She also records music at various studios for motion pictures. Popov used her living room to practice and make recordings for practice purposes and for demonstration tapes for orchestras.

For 1993, she deducted 40 percent of her annual rent and 20 percent of her annual electricity bills--which the IRS disallowed. The Tax Court upheld this disallowance. However, on April 17, the Ninth Circuit Court of Appeals reversed the Tax Court and allowed these deductions.