Guido Ruggiero and Kristin Ruggiero - Page 21

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          of renting their house with a profit motive and are therefore               
          precluded from deducting under section 162 or section 212                   
          expenses attributable to its rental use.  Accordingly, respondent           
          disallowed all of petitioners' claimed expenses for cleaning and            
          maintenance and depreciation attributable to the rental use of              
          their house and asserted that the rental income was reportable as           
          "other income".  Petitioners concede that they are not entitled             
          to the depreciation and maintenance expenses claimed on Schedule            
          E of their original and amended returns.  Petitioners, however,             
          argue that they may fully offset the rental income by mortgage              
          interest attributable to the rental use of the house.                       
               Section 280A(a) provides that, except as otherwise provided            
          in that section, no deduction otherwise allowable under chapter 1           
          of the Internal Revenue Code is allowable "with respect to the              
          use of a dwelling unit which is used by the taxpayer during the             
          taxable year as a residence."  A taxpayer uses a dwelling during            
          the taxable year as a residence if he uses the unit for personal            
          purposes for a number of days which exceeds the greater of 14               
          days or 10 percent of the number of days during the taxable year            
          for which the dwelling unit was rented at fair market value.                
          Sec. 280A(d)(1).  Nevertheless, some deductions that are                    
          attributable to the rental use of a dwelling unit are excepted              
          from the blanket disallowance of section 280A(a) and can be                 
          deducted subject to the limitations imposed by subsections (c)(5)           

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