Charles E. King - Page 4

                  SEC. 280A.  DISALLOWANCE OF CERTAIN EXPENSES IN CONNECTION                              
            WITH BUSINESS USE OF HOME, RENTAL OF VACATION                                                 
            HOMES, ETC.                                                                                   
                        (a) General Rule.--Except as otherwise provided in this                           
                  section, in the case of a taxpayer who is an individual or                              
                  an S corporation, no deduction otherwise allowable under                                
                  this chapter 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.                                                            
                                     *     *     *     *     *                                            
                        (c) Exceptions for Certain Business or Rental Use;                                
                  Limitation on Deductions for Such Use.--                                                
                               (1) Certain business use.--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--                                             
                                     (A) [as] the principal place of business for                         
                               any trade or business of the taxpayer,                                     
                                     *     *     *     *     *                                            
                               (5) Limitation on deductions.--In the case of a                            
                        use described in paragraph (1) * * * the deductions                               
                        allowed under this chapter for the taxable year by                                
                        reason of being attributed to such use shall not exceed                           
                        the excess of--                                                                   
                                     (A) the gross income derived from such use                           
                               for the taxable year, over                                                 
                                     (B) the sum of--                                                     
                                           (i) the deductions allocable to such use                       
                                     which are allowable under this chapter for                           
                                     the taxable year whether or not such unit (or                        
                                     portion thereof) was so used, and                                    
                                           (ii) the deductions allocable to the                           
                                     trade or business (or rental activity) in                            
                                     which such use occurs (but which are not                             
                                     allocable to such use) for such taxable year.                        

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Last modified: May 25, 2011