- 7 - Consistent with her examinations of FOTA, respondent reduced the losses claimed by petitioner from FOTA by $17,101 and $21,891 for the years 1987 and 1989, respectively, and increased the losses claimed by $24,070 for the year 1988. OPINION Section 162(a) generally allows a deduction for all ordinary and necessary expenses paid or incurred during the taxable yearin carrying on a trade or business. Section 280A(a) provides that in the case of a taxpayer who is an individual or an S corporation, no deduction otherwise allowable under chapter 1 (Normal Taxes and Surtaxes) shall be allowed with respect to the use of a dwelling unit which is used by the taxpayer during the taxable year as a residence. The term "dwelling unit" includes a house, apartment, condominium, or similar property, and all structures or other property appurtenant to such dwelling unit. Sec. 280A(f)(1). Section 280A(c)(1) provides an exception to section 280A(a) stating that subsection (a) shall not apply to any item to the extent such item is allocable to a portion of the dwelling unit which is exclusively used on a regular basis as the principal place of business for any trade or business of the taxpayer. Sec. 280A(c)(1)(A).4 Section 280A(c)(5) provides a limitation on 4In her brief, respondent raised an argument that petitioner failed to satisfy the "exclusive use" test with respect to the basement level of the building. The argument is inconsistent with allocations expressly and implicitly made in respondent'sPage: Previous 1 2 3 4 5 6 7 8 9 10 Next
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