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Personal Residence
Petitioners claim that one-fifth of all expenses of their
residence in Orange, California, qualify under section 280A as
deductible home office expenses relating to petitioner's various
business and investment activities. Petitioners claim that five
rooms or one-fifth of the residence was used exclusively for
business. Respondent claims that none of the residence
qualifies as a home office and that none of the expenses of the
residence qualify as deductible home office expenses. We agree
with respondent.
The evidence does not establish that any portion of
petitioners' residence satisfies the threshold requirements of
section 280A(c)(1); namely, that the alleged home office
qualifies either as "the principal place of business" for at
least one business of the taxpayer, as a place in which the
taxpayer meets with clients in the normal course of at least one
of his business activities, or as a structure separate from the
residence.
The evidence is clear that petitioners' alleged home office
does not qualify as a place in which petitioners regularly met
with clients, nor as a structure separate from their residence.
With regard to whether petitioners' alleged home office
qualifies as "the principal place of business" for any of
petitioner's businesses, the evidence is conspicuously thin.
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