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was $800 per month). The records of “personal” items each month
during the years in issue, however, showed less than the alleged
personal portion of the rent. Moreover, in addition to recording
alleged business rent on Schedule C for 1993, petitioners claimed
a rental loss on Schedule E because they did not recover the rent
from the business. Thus, the rent was deducted twice on that
return. In any event, a cash basis taxpayer cannot deduct as a
loss income that was not received or previously reported. See,
e.g., Hort v. Commissioner, 313 U.S. 28, 32-33 (1941); Marks v.
Commissioner, 390 F.2d 598 (9th Cir. 1968), affg. T.C. Memo.
1966-62. Petitioners’ claims regarding rent expense are patently
untenable.
In addition, petitioners have not made the showing required
to deduct expenses relating to business use of their home.
Section 280A provides in pertinent part as follows:
(a) General Rule.--Except as otherwise provided in
this section, in the case of a taxpayer who is an
individual or an S corporation, no deduction otherwise
allowable under this chapter shall be allowed with
respect to the use of a dwelling unit which is used by
the taxpayer during the taxable year as a residence.
* * * * * * *
(c) Exceptions for Certain Business or Rental Use;
Limitation on Deductions for Such Use.
(1) Certain business use.--Subsection (a)
shall not apply to any item to the extent such
item is allocable to a portion of the dwelling
unit which is exclusively used on a regular
basis--
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