Courts have looked to various factors to determine whether an employment relationship exists between the parties. Relevant factors include: (1) The amount of control the principal exercises over the details of the work; (2) which party invests in the work facilities; (3) who has the opportunity for profit or loss; (4) whether the principal has the right to discharge the individual; 1993 Tax Ct. Memo LEXIS 313">*321 (5) whether the work is an integral part of the principal's regular business; (6) the permanency of the relationship; and (7) the relationship the parties believe they are creating. United States v. Silk, 331 U.S. 704">331 U.S. 704, 331 U.S. 704">716 (1947); Professional & Executive Leasing, Inc. v. Commissioner, 89 T.C. 225">89 T.C. 225, 89 T.C. 225">232 (1987), affd. 862 F.2d 751">862 F.2d 751 (9th Cir. 1988); Simpson v. Commissioner, 64 T.C. 974">64 T.C. 974, 64 T.C. 974">984-85 (1975). There is no one controlling factor. Rather, we must look at all of the facts and circumstances of each case. Sec. 31.3401(c)-1(d), Employment Tax Regs.

The present case, as in almost all of the others, has factors going both ways. After weighing those factors, we find that petitioner was self-employed during the years in issue.

One of the most important factors in our consideration is that, except for designation by Woodward as to the sale upon which petitioner would work, petitioner was free to run his job as he saw fit. He was able to set his own hours and days of work, determine the most efficient method to cut and trim the timber, determine the method in which1993 Tax Ct. Memo LEXIS 313">*322 he would accomplish those tasks, and set the sequence in which those tasks were performed.

Petitioner supplied the equipment, tools, fuel, and supplies to accomplish his work. He determined which type of equipment he would work with and, consequently, had to absorb the relative costs associated therewith. As seen from the amounts petitioner deducted on Schedule C and E, his expenses were substantial in amount, especially when compared with his gross income. Moreover, if petitioner damaged any portion of the sale, such as a fence or power line, he was responsible for its repair, subjecting him to potential loss if he did not perform his job properly.

Further, although petitioner was paid on an hourly basis, Woodward did not provide petitioner any fringe benefits. He received no sick leave, paid vacation time, or health or disability benefits. Moreover, there is no indication that Woodward sponsored or contributed to any retirement plan in which petitioner could participate.

Admittedly, petitioner did provide some services to Woodward not ordinarily within the scope of the duties of a self-employed contractor. For instance, he supervised other members of the crew, made onsite1993 Tax Ct. Memo LEXIS 313">*323 decisions concerning how they would conduct the work, and kept track of the hours worked by them. However, Woodward asked petitioner to perform these services for him, not as a prerequisite to accomplishing his work, but because of petitioner's 40 years of experience as a cutter.

On balance then, we find that petitioner is a skilled craftsman who was engaged to achieve an end result, that is to cut timber in certain geographic locations and within a certain time frame designated by Woodward Logging, but without specific direction from Woodward Logging as to how to accomplish the work. Based on these facts, we hold that petitioner was self-employed during the years in issue and, accordingly, is required to report his gross income on Schedule C. ⁴

1993 Tax Ct. Memo LEXIS 313">*324 Schedule E

Woodward Logging reported on Form 1099 that 60 percent of the amount it paid to petitioner was equipment rental. Consequently, petitioner reported that portion of his gross income on Schedule E.

However, there is no evidence in the record that petitioner rented any vehicles or equipment to Woodward Logging. Rather, petitioner supplied and paid for the truck and all of the equipment he needed to perform the services he rendered, and the truck and equipment that he owned, he used himself in the performance of such services.

A taxpayer may not determine the nature of his income merely by using a particular form, or by labeling it as he wishes, but must report his income based on the economic realities of the situation. See Frank Lyon Co. v. United States, 435 U.S. 561">435 U.S. 561 (1978); Upham v. Commissioner, 923 F.2d 1328">923 F.2d 1328, 923 F.2d 1328">1335 (8th Cir. 1991), affg. T.C. Memo. 1989-253. Because petitioner did not rent any equipment to Woodward, it did not pay petitioner for equipment rental. Therefore, there is no justification for segregating any of the income received from Woodward Logging as "equipment1993 Tax Ct. Memo LEXIS 313">*325 rental" on a separate Schedule E. Consequently, we hold that all of the income received by petitioner from his business as a cutter, less all of the expenses incurred in performing such services, should have been reported on Schedule C.

Truck Expenses

During the years in issue, petitioner used two four-wheel drive vehicles to cut logs for Woodward Logging and deducted all of the expenses including depreciation attributable to those vehicles from his gross income. In the notice of deficiency, respondent determined that petitioner was entitled to deduct 60 percent of his claimed deduction for the expense of traveling during the day between sites but disallowed 40 percent, as commuting expenses, for the expense of traveling each day from Hill City to the first site to be cut and from the last site back to Hill City. Petitioner claims that his truck expenses are deductible because they constitute an ordinary and necessary business expense of carrying on his business of cutting timber.

Section 162(a) provides a deduction for all the ordinary and necessary expenses paid or incurred in carrying on a trade or business. Sanford v. Commissioner, 50 T.C. 823">50 T.C. 823, 50 T.C. 823">826 (1968),1993 Tax Ct. Memo LEXIS 313">*326 affd. per curiam 412 F.2d 201">412 F.2d 201 (2d Cir. 1969). An ordinary and necessary expense is one which is appropriate and helpful to the taxpayer's business and which results from an activity which is common and accepted practice. Deputy v. du Pont, 308 U.S. 488">308 U.S. 488, 308 U.S. 488">495 (1940); Boser v. Commissioner, 77 T.C. 1124">77 T.C. 1124, 77 T.C. 1124">1132 (1981), affd. without published opinion (9th Cir. 1983); Ford v. Commissioner, 56 T.C. 1300">56 T.C. 1300, 56 T.C. 1300">1306 (1971), affd. per curiam 487 F.2d 1025">487 F.2d 1025 (9th Cir. 1973).

Petitioner used his truck to travel from Hill City to various sites in the Black Hills to cut timber. As a sale was generally composed of hundreds of acres, it follows that petitioner had to drive to different uncut sites each day. Petitioner also had to go from one site to other sites during the day, but, since respondent has already allowed the cost of this traveling as an ordinary and necessary business expense, it is not at issue here. With regard to petitioner's cost of traveling to his first site in the morning and from his last site in the afternoon however, respondent maintains1993 Tax Ct. Memo LEXIS 313">*327 that such expenses constituted "commuting" expenses and therefore are not deductible.

It is well settled that the cost of commuting between one's residence and regular place of employment is a nondeductible personal expense. Sec. 262; Commissioner v. Flowers, 326 U.S. 465">326 U.S. 465, 326 U.S. 465">473-474 (1946); secs. 1.162-2(e) and 1.262-1(b)(5), Income Tax Regs. In Turner v. Commissioner, 56 T.C. 27">56 T.C. 27, 56 T.C. 27">33 (1971) (quoting from Heuer v. Commissioner, 32 T.C. 947">32 T.C. 947, 32 T.C. 947">953 (1959), affd. 283 F.2d 865">283 F.2d 865 (5th Cir. 1960)), we defined the term "commuting" as:

travel between the petitioner's residence and points of assignment and return * * *.

However, the cost to a taxpayer of traveling between his residence which is also his principal place of business and his first job site and return may be deductible. See Adams v. Commissioner, T.C. Memo. 1982-223, affd. without published opinion 732 F.2d 159">732 F.2d 159 (7th Cir. 1984), and cases cited therein. As stated in Wisconsin Psychiatric Services, Ltd. v. Commissioner, 76 T.C. 839">76 T.C. 839, 76 T.C. 839">849 (1981),1993 Tax Ct. Memo LEXIS 313">*328 a deduction is allowable to a taxpayer for-

travel between his home and other places of business where the use of his home * * * is so central to his business that trips from his home to his other places of business are in the nature of normal and deductible business travel. [fn. ref. omitted.]

Using the above test, we find that petitioner's workshop and surrounding premises was his principal place of business. He used it to perform every business function necessary to his business of cutting timber except for the actual cutting of the trees. He stocked his parts there, held his fuel supplies there and, except when they were in use, stored his vehicles and equipment there. He performed all necessary repairs and maintenance to his equipment there. He also performed all office and clerical duties there, including receiving his assignments, keeping track of, paying for and recording his expenses.

Before leaving in the morning, petitioner usually telephoned Woodward Logging to receive his assignments, checked his equipment, replenished his fuel supplies, replaced missing spare parts, and loaded his truck. In the evenings, he returned so that he could perform necessary 1993 Tax Ct. Memo LEXIS 313">*329 maintenance and store his truck and equipment in a secure place.

Petitioner's workshop was absolutely essential to his business. He could not have performed the above related tasks without the use of his workshop and surrounding premises. Equipment simply cannot be repaired out in the middle of the forest, where petitioner does not have access to specialized tools, equipment, and the electricity necessary to make them run. Moreover, the workshop protected petitioner and his equipment from the inclement weather allowing the repairs to be done. It was the only place he had the facilities necessary to maintain his equipment, without which he could not cut any timber.

In contrast, petitioner went to dozens of cutting sites in the Black Hills. He was at each site for a relatively short period of time. Moreover, he had no choice as to which cutting site he would work at nor for what length of time he would work at such site. When comparing the importance of any of the many sites on which petitioner cut timber with his workshop and surrounding premises where he performed all of the other necessary functions of his business, and spent more time than at any of his cutting sites, it1993 Tax Ct. Memo LEXIS 313">*330 becomes obvious that petitioner's workshop was his principal place of business. See Adams v. Commissioner, T.C. Memo. 1982-223, affd. without published opinion 732 F.2d 159">732 F.2d 159 (7th Cir. 1984).

Respondent argues, however, that we should view the Black Hills as a whole; that the Black Hills was petitioner's principal place of business and therefore travel to and from his residence constituted commuting. She analogizes petitioner's traveling to that of a taxpayer living in Chicago, who would be held to be commuting to any place within that metropolitan area. She states that the metropolitan area of Chicago is greater than the area of the Black Hills, and, therefore, we should hold that any place petitioner traveled to in the Black Hills first in the morning or last in the evening should be considered a commute.

However, even assuming that respondent is correct in calculating that the metropolitan area of Chicago is larger than the Black Hills (and we make no finding in this regard), in her analogy respondent assumes that the taxpayer in Chicago is going from his residence to a place of business. However, in petitioner's case, 1993 Tax Ct. Memo LEXIS 313">*331 the travel starts at his principal place of business and goes to another place of business, for a business purpose. Therefore, it is not a "commute".

Moreover, in her argument, respondent assumes that the entire city of Chicago (as well as the Black Hills) is the taxpayer's principal place of business. However, each location in which the taxpayer does business within the city of Chicago (as well as the Black Hills) is a separate place of business. Therefore, we consider each cutting site in the Black Hills to be a separate place of business for petitioner, ⁵ and, in doing so, conclude that not one of these sites was critical, or indeed, very important to petitioner's business.

Basically, respondent is arguing that we should find that petitioner's principal place of business was someplace that he worked temporarily1993 Tax Ct. Memo LEXIS 313">*332 in the Black Hills forest. We rejected this type of premise in Peat Oil and Gas Associates v. Commissioner, T.C. Memo. 1993-130, where the taxpayer argued that its principal place of business was at the location of its oil and gas wells in Ohio, rather than at its offices in New York. In that case, we observed that:

It is difficult to conceptualize a principal place of business that is not the place where the * * * [business] maintained contact with the outside world. * * *. To agree with petitioners, we would have to hold that the principal place of business of these * * * [businesses] was at an indefinite location in the State of Ohio, where there were no employees, or offices * * * where the * * * [business] could be reached. A principal place of business should at least have a mailing address.

So, too, in this case, if we were to adopt respondent's reasoning, we would have to find that petitioner's principal place of business was some indefinite location in the Black Hills forest, where petitioner worked temporarily and probably would never work again, and where there was no facility where he could be reached, or to which a letter could1993 Tax Ct. Memo LEXIS 313">*333 be mailed. We have already rejected such a concept in Peat Oil and Gas Associates v. Commissioner, supra.

Finally, respondent argues that since petitioner is not claiming that he has an office in his home for which a deduction is allowable under section 280A, petitioner's home is not his principal place of business and, therefore, travel from his residence to his first site in the morning constitutes commuting. As explained in her brief-

Respondent maintains, and for this reason IRC section 280A is discussed, that unless a taxpayer qualifies for IRC section 280A, the taxpayer cannot claim the home as a job site because to so claim would allow the taxpayer to circumvent IRC section 280A and thus transform nondeductible IRC section 262 commuting expenses into deductible transportation expenses under IRC section 162(a).

However, the fact that petitioner did not claim a deduction under section 280A may be attributable to his failure to fulfill other requirements under that section (other than the lack of a "principal place of business" requirement). For instance, petitioner may have failed to qualify under section 280A because he did not1993 Tax Ct. Memo LEXIS 313">*334 use a part of his residence exclusively for business. See sec. 280A(c)(1). Therefore, respondent's conclusion is just not warranted; petitioner need not raise an issue under section 280A in order for us to find that his residence was his principal place of business.

To summarize, petitioner's truck expenses are deductible under section 162(a) if they constitute ordinary and necessary business expenses. In producing gross income as a cutter, petitioner paid truck expenses to transport him from his workshop, which we have found to be his principal place of business, to various sites in the Black Hills to cut timber. We find that those expenses are ordinary and necessary and, accordingly, deductible under section 162(a).

Decision will be entered under Rule 155.