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living, or family expenses may be deducted, except as otherwise
expressly provided in the Code. Furthermore, section 280A
narrows the general deductibility rule of section 162 when
deductions are claimed for the expenses of an office in the home.
Sec. 280A(a).
Section 280A(a) denies deductions with respect to the use of
a dwelling unit used by the taxpayer as a residence during the
taxable year. Section 280A(c), however, permits the deduction of
expenses allocable to a portion of the dwelling unit that is used
exclusively and on a regular basis as "the principal place of
business" for any trade or business of the taxpayer. Sec.
280A(c)(1)(A). Additionally, items such as taxes and interest
are allowable as deductions without regard to the business use of
a dwelling. Sec. 280A(b).
We now apply these principles to the various expenses
petitioners claimed on Schedule C for the taxable years in issue.
Mortgage Interest Deductions
On their Schedule C, petitioners' claimed deductions for
mortgage interest in the amounts of $6,402, $8,442, and $7,939
for 1988, 1989, and 1990, respectively. Respondent concedes that
petitioners are entitled to deduct mortgage interest for 1988,
1989, and 1990, but contends that such interest is deductible on
Schedule A rather than on Schedule C, as claimed by petitioners.
See supra note 2.
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