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proscribed by section 280A(d)(1), and, therefore, section 280A(a)
applied. Alternatively, respondent disallowed some of the
expenses claimed as to both properties for lack of
substantiation. The amounts disallowed were $4,876, $4,400, and
$3,567, respectively, for 1990, 1991, and 1992.5
Section 280A(a) provides generally that, in the case of an
individual or an S corporation, no deduction otherwise allowable
shall be allowed with respect to the use of a dwelling unit that
is used by the taxpayer during the taxable year as a residence,
except as otherwise provided in section 280A. Section 280A(d)(1)
provides generally that a taxpayer is considered as using a
dwelling unit as a residence if the taxpayer uses the unit for
personal purposes during the taxable year for the greater of 14
days or 10 percent of the number of days the unit is rented at a
fair rental. In such circumstances, where a unit is put to a
rental use and is also used by the taxpayer as a residence, the
deduction of expenses attributable to the dwelling unit is
limited to the gross rental income derived from the property.
Sec. 280A(c)(5).
5
The amounts disallowed for 1990 and 1991 do not include the
depreciation claimed on the rental unit as to which respondent
applies sec. 280A. The notices of deficiency for these 2 years
include a separate adjustment disallowing the depreciation
claimed on this property for the additional reason that
petitioners had no depreciable basis in the property. That same
issue carries over to 1992 in respondent's disallowance of the S
corporation loss. The depreciation adjustment, therefore, is
addressed as a separate issue.
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