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Home Office Expenses - Rent and Utilities
Petitioner claimed deductions for rent and utilities paid
with respect to her home office in the amounts of $1,200 and
$1,289, respectively.
Section 280A(a) provides that in the case of a taxpayer who
is an individual, no deduction otherwise allowable under
chapter 1 of the Code (relating to normal taxes and surtaxes)
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.
The term "dwelling unit" includes a house, apartment,
condominium, or similar property, and all structures or other
property appurtenant to such dwelling unit. Sec. 280A(f)(1)(A).
Section 280A(c) provides for exceptions to section 280A(a).
In pertinent part, section 280A(c)(1)(A) states that section
280A(a) shall not apply to any item to the extent that such item
is allocable to a portion of the dwelling unit which is
exclusively used on a regular basis as the principal place of
business for any trade or business of the taxpayer. We are
convinced from the record that 50 percent of petitioner's
apartment was exclusively used on a regular business for her band
management activities. We must also, however, address the
question of whether the home office constitutes her principal
place of business.
The Supreme Court in Commissioner v. Soliman, 506 U.S. 168
(1993), postulated two primary considerations to decide whether
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Last modified: May 25, 2011