James B. Miller, Jr. - Page 10

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          associated with a home office are generally disallowed unless the           
          home office was used exclusively and regularly as the principal             
          place of business for the taxpayer.                                         
               Where a taxpayer’s business is conducted in part in the                
          taxpayer’s residence and in part at another location, the                   
          following two primary factors are analyzed in determining whether           
          the home office qualifies under section 280A(c)(1)(A) as the                
          taxpayer’s “principal” place of business:  (1) The relative                 
          importance of the functions or activities performed at each                 
          business location; and (2) the amount of time spent at each                 
          location.  Commissioner v. Soliman, 506 U.S. 168, 175-177 (1993).           
               Whether the functions or activities performed at the home              
          office are necessary to the business is relevant but not                    
          controlling, and the location at which goods and services are               
          delivered to customers generally will be regarded as the                    
          principal place of a taxpayer’s business.  Id. at 176.  The                 
          relative importance of business activities engaged in at the home           
          office may be substantially outweighed by business activities               
          engaged in at another location.  The Supreme Court has explained            
          as follows:                                                                 

               If the nature of the business requires that its                        
               services are rendered or its goods are delivered at a                  
               facility with unique or special characteristics, this                  
               is a further and weighty consideration in finding that                 
               it is the delivery point or facility, not the                          
               taxpayer's residence, where the most important                         
               functions of the business are undertaken.  Id. at 176.                 





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