- 7 - Congress enacted section 280A as part of the Tax Reform Act of 1976, Pub. L. 94-455, sec. 601, 90 Stat. 1520, 1569, as its response to the concern that rental of property used as a residence by the taxpayer's family "afforded the taxpayer unwarranted opportunities to obtain deductions for expenses of a personal nature." Bolton v. Commissioner, 77 T.C. 104, 108 (1981), affd. 694 F.2d 556 (9th Cir. 1982). Under section 280A no deduction can be taken by a taxpayer with respect to a dwelling unit used as a residence by a taxpayer during the taxable year except for deductions, such as interest and taxes, which are allowable without regard to their connection to an income producing activity or a trade or business. Sec. 280A(a) and (b). A taxpayer is considered to have used a dwelling unit as a residence during the taxable year if the unit is used for personal purposes for the greater of 14 days or 10 percent of the number of days for which the unit is rented at a fair rental. Sec. 280A(d)(1). If a dwelling unit is rented to a member of the taxpayer's family, as defined in section 267(c)(4), for any part of a day, the unit is deemed to have been used on that day by the taxpayer for personal purposes unless the unit is used as the principal residence of the family member and the rent charged to the family member reflects a fair rental for the unit. Sec. 280A(d)(2)(A), (3)(A); Kotowicz v. Commissioner, T.C. Memo. 1991- 563; Gilchrist v. Commissioner, T.C. Memo. 1983-288.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011