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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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