Leslie A. and Betsy M. Roy - Page 6

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          Sec. 280A(a).  If the taxpayer rents out his dwelling unit,                 
          deductions are allowed only to the extent the gross income                  
          derived from renting the property exceeds certain expenses.  Sec.           
          280A(c)(3), (c)(5).                                                         
               Petitioners received $12,000 in taxable years 1992 and 1993            
          from Roy Farms for the use of certain areas of their house and              
          surrounding property.  They do not dispute receiving this income,           
          but they contest respondent's disallowance of any exclusions or             
          deductions to offset this income.                                           
               The arrangement petitioners have with Roy Farms, respondent            
          argues, is one that falls squarely within the disqualifying                 
          language of section 280A(c)(6).  Section 280A(c)(6) provides that           
          no deduction shall be allowed for "any item which is attributable           
          to the rental of the dwelling unit (or any portion thereof) by              
          the taxpayer to his employer during any period in which the                 
          taxpayer uses the dwelling unit (or portion) in performing                  
          services as an employee of the employer."                                   
               We agree with respondent that deduction by petitioners of              
          any rental expenses that may be otherwise allowable by section              
          280A(c)(3) is disallowed by reason of section 280A(c)(6).  The              
          meaning of the statutory language is clear.  There shall be no              
          deduction for expenses attributable to the rental use of a                  
          personal residence by an employee when the property is rented to            
          the employee's employer.  The parties stipulated that petitioner            
          is employed by Roy Farms, and that he received $1,000 per month             



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