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For the taxable year 1988, petitioners claimed a deduction
on their Schedule C for rent in the amount of $6,500. Respondent
determined that $1,300 of the rent expense was personal and
nondeductible under section 262 because it represented a rental
payment for petitioners' personal residence.
Petitioners introduced into evidence a copy of the $1,300
check used to pay the rent in question. The notation at the
bottom of the check reads "Rent Dec & Jan 103 Salina Ct".
Petitioners lived temporarily at 103 Salina Court while they
looked for a permanent residence.
Section 262 restricts deductions for personal, family, and
living expenses. In this case, petitioners have failed to show
the business purpose of the $1,300 rent paid. Petitioners admit
that the house located at 103 Salina Court was their personal
residence. The rental payment is, therefore, a nondeductible
personal, living, or family expense under section 262. See Tyler
v. Commissioner, T.C. Memo. 1991-537 (rental expense deduction
for taxpayer's personal place of residence was a personal expense
disallowed by section 262).
We take note that petitioners, on brief, contend that they
used part of the temporary residence at 103 Salina Court to
maintain records and do the accounting for the counseling
business. This does not alter our analysis. In order for
petitioners to deduct any portion of the rent under this set of
facts, petitioners must prove that the residence at 103 Salina
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