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residence. The expenses for which a deduction was claimed included:
Stained glass windows in the living room and foyer, a closet in the
bedroom of one of their daughters, a trailer pad for petitioners’
recreational vehicle, miscellaneous carpentry work, a dehumidifier,
an intercom system, and rain gutters.
Petitioners claimed depreciation based on a percentage of all
repairs or improvements to both their Mission Viejo and Poway
residences, as well as their day-to-day costs of maintaining each
residence (such as the costs for their housekeeper, gardener, cable
television, dishwasher repair, plumbing, etc.), whether business
related or not.
As previously stated, petitioners have not met the tests of
section 280A(c)(1); thus they are not entitled to the claimed
depreciation deduction.
b. Telephone Expenses
Petitioners claimed a deduction for $2,581 of telephone
expenses (both for regular and cellular telephones). They had a
second telephone line installed at both their Mission Viejo and
Poway residences.
At first, petitioners argued that these telephone lines were
used exclusively for business purposes. They later admitted that
although they had deducted 100 percent of these expenses, personal
calls were also made from these telephones. Petitioners were
unable to approximate the percentage of business use.
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