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Petitioner argues that the income against which we apply the
section 280A(c)(5) limitation is the gross income from the
Broadmoor Gardens and farm activity as a whole. We disagree.
Section 280A(c)(5) specifically limits the taxpayer's deduction
for business use of a residence to the amount of income derived
from the business use of the residence. Petitioner contends that
she earned $1,100 from tour tickets in 1990. However, she
reported no ticket income on her 1990 return, and Broadmoor
Gardens did not open until 1993. Thus, we conclude that
petitioner had no income from business use of her residence in
1990 and 1991, and that she may not deduct depreciation related
to her residence for 1990 and 1991. See sec. 280A(c)(5)(A).4
The result would not differ even if we considered all of the
income from petitioner's farm and garden activity. That is
because, under section 280A(c)(5)(B)(ii), we would consider only
income in excess of expenses. Petitioner had large losses from
her farm and garden activity in the years at issue.
4 To the extent deductions are disallowed under sec.
280A(c)(5), they may be carried forward to the succeeding taxable
year. See sec. 280A(c)(5), flush language. Sec. 168(e)(3)(D)
provides a 10-year period for depreciation for single purpose
horticultural structures as defined by sec. 168(i)(13)(B)(ii).
Petitioner contends that the conservatory is a single purpose
horticultural structure. Petitioner also contends that she used
the conservatory exclusively for business. Based on our holding
that petitioner may not depreciate any costs of the conservatory
in 1990 and 1991, we need not decide whether petitioner used the
conservatory exclusively for business in 1990 and 1991 or whether
the conservatory was a single purpose horticultural structure
under sec. 168(i)(13)(B)(ii).
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