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Section 280A limits the allowance of deductions related to
the use of a home office. There is an exception if a portion of
the house is used exclusively on a regular basis as the principal
place of business for the taxpayer’s trade or business. Sec.
280A(c)(1)(A). Section 280A(c) requires that the taxpayer “use
the portion of the home solely for the purpose of carrying on a
trade or business and that there be no personal use of that part
of the home.” Sengpiehl v. Commissioner, T.C. Memo. 1998-23.
Petitioner deducted $1,480 for his home office expenses. He
also deducted $445 for utilities and $835 for supplies used in
conjunction with his home office. Petitioner provided limited
testimony regarding his use of the home office. Petitioner
admitted that his renter also had use of the home office. While
petitioner may have used the home office for some business
purposes, petitioner failed to show that the home office was used
exclusively for business purposes. Accordingly, we sustain
respondent’s disallowance of the claimed home office deductions.
Respondent allowed $1,126 of petitioner’s claimed Schedule E
deductions ($46 cleaning and maintenance expense + $30 insurance
expense + $858 repairs expense + $192 utilities expense) because
a small portion of his Hallwood property was considered rental
property. Respondent also allowed petitioner a $574 depreciation
deduction. Respondent explained this was with respect to
furniture purchased by petitioner for the Hallwood residence
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Last modified: May 25, 2011