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Section 280A(c)(5) provides an overall limitation on the
deductions that may be allowed under various sections including
section 280A(c)(1)(A). Specifically, section 280A(c)(5) provides
that the deductions allowed shall not exceed the excess of the
gross income derived from the trade or business use for the
taxable year, over the sum of certain deductions allocable to
such income (such as interest and taxes).
Petitioner bases her argument on section 17958.11 of Cal.
Health and Safety Code (West 1984) (hereinafter referred to as
California Law.) California Law provides for the adoption of
building regulations for the conversion of commercial or
industrial buildings to joint living and work quarters.
California Law recognizes that joint living and work quarters
means residential occupancy by a family maintaining a common
household of one or more floors in a building originally designed
for industrial or commercial occupancy, which building includes
cooking space and sanitary facilities and adequate working space
regularly used by a person residing in that building.
Those provisions of California Law were based on legislative
determinations that a substantial number of manufacturing and
commercial buildings in urban areas have lost manufacturing and
commercial tenants, and that the untenanted portions of such
buildings constitute a potential resource capable of
accommodating joint living and work quarters which would be
physically and economically suitable for use by artists,
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Last modified: May 25, 2011