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the deductions that may be allowed under section 280A(c)(1)(A).
Specifically, section 280A(c)(5) provides that the deductions
allowed shall not exceed the excess of the gross income derived
from the trade or business use for the taxable year, over the sum
of certain deductions allocable to such income.5
The parties agree that at least the top floor of the
building which petitioner used as a residence constitutes a
dwelling unit as defined in section 280A(f)(1)(A) and that
petitioner used such dwelling unit as his residence during the
relevant periods. Petitioner argues, however, that section 280A,
and particularly the limitations on deductions imposed by section
280(c)(5), are not applicable because only the upper level of the
building constitutes a dwelling unit. According to petitioner,
the basement and street levels, which were used for art gallery
business purposes, should not be considered part of the dwelling
unit, or appurtenant to it. Respondent argues the entire
building constitutes the dwelling unit. In support of her
argument respondent relies heavily upon the fact that physically
there is unrestricted access to all parts of the building from
any location within the building.
examination of FOTA and reflected in certain adjustments made to
FOTA's income for the years in issue. Because the argument was
first made in her brief, it will not be considered. See
Markwardt v. Commissioner, 64 T.C. 989 (1975).
5Petitioner agrees that if the provisions of sec. 280A(c)(5)
are applicable, respondent's adjustments to the losses reported
by FOTA for the years in issue are correct.
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