Henry Peter Novick and Carolyn S. Novick - Page 12

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            Schedule E rental expenses in excess of those allowed by                                   
            respondent.                                                                                
            Miscellaneous Employee Business Expenses                                                   
                  Petitioners introduced no documentation to substantiate any of                       
            the disallowed miscellaneous employee business expenses for any of                         
            the years under consideration.  Nor was there any meaningful                               
            testimony to support petitioners' entitlement to the claimed                               
            employee business expenses.                                                                
                  With respect to the claimed office and storage expenses (which                       
            relate to Dr. Novick's use of petitioners' residence to store                              
            medical records of inactive patients  and  certain  medical                                
            equipment), petitioners failed to come within any of the exceptions                        
            provided by section 280A(c) to the general rule denying a deduction                        
            for home office expenses.3  We specifically note that (1)                                  

                  3     Sec. 280A provides generally that no deduction is                              
            allowable with respect to the use of a dwelling unit which is                              
            used by the taxpayer during the taxable year as a residence.                               
            Sec. 280A(c) provides exceptions to this general rule.                                     
                        Pursuant to sec. 280A(c)(1), a taxpayer may deduct an                          
            otherwise allowable item of expense allocable to the portion of a                          
            taxpayer's personal residence which is used exclusively on a                               
            regular basis:                                                                             
                        (A) [as] the principal place of business for                                   
                        any trade or business of the taxpayer,                                         
                        (B) as a place of business which is used by                                    
                        patients, clients, or customers in meeting                                     
                        with the taxpayer in the normal course of                                      
                        * * * [the taxpayer's] trade or business, or                                   
                        (C) in the case of a separate structure                                        
                        which is not attached to the dwelling unit,                                    
                                                                         (continued...)                






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