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(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
or dealing with the taxpayer in the normal
course of his trade or business, or
(C) in the case of a separate structure
which is not attached to the dwelling unit,
in connection with the taxpayer’s trade or
business.
In the case of an employee, the preceding sentence
shall apply only if the exclusive use referred to
in the preceding sentence is for the convenience
of his employer.
* * * * * * *
(5) Limitation on deductions.--In the case of
a use described in paragraph (1), (2), or (4), and
in the case of a use described in paragraph (3)
where the dwelling unit is used by the taxpayer
during the taxable year as a residence, the
deductions allowed under this chapter for the
taxable year by reason of being attributed to such
use shall not exceed the excess of--
(A) the gross income derived from such
use for the taxable year, over
(B) the sum of--
(i) the deductions allocable to
such use which are allowable under this
chapter for the taxable year whether or
not such unit (or portion thereof) was
so used, and
(ii) the deductions allocable to
the trade or business (or rental
activity) in which such use occurs (but
which are not allocable to such use) for
such taxable year.
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Last modified: May 25, 2011