Joseph A. Morcos and Joann M. Morcos - Page 11

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          but that they are subject to the limitation of section                      
          280A(c)(5), which specifically applies to a use described in                
          section 280A(c)(3) where the dwelling unit is used by the                   
          taxpayer during the taxable year as a residence.                            
               Petitioners next contend that their third floor units come             
          within the provision of section 280A(f)(1)(B) which excludes from           
          the limitations of section 280A that portion of a dwelling unit             
          “used exclusively as a hotel, motel, inn, or similar                        
          establishment.”  They rely on the following proposed regulation:            
               Exception.  Notwithstanding the provisions of paragraph                
               (c)(1) of this section, the term “dwelling unit” does                  
               not include any unit or portion of a unit which is used                
               exclusively as a hotel, motel, inn, or similar                         
               establishment.  Property is so used only if it is                      
               regularly available for occupancy by paying customers                  
               and only if no person having an interest in the                        
               property is deemed under the rules of this section to                  
               have used the unit (or the portion of the unit) as a                   
               residence during the taxable year.  Thus, this                         
               exception may apply to a portion of a home used to                     
               furnish lodging to tourists or to long-term boarders                   
               such as students. [Sec. 1.280A-1(c)(2), Proposed Income                
               Tax Regs., 45 Fed. Reg. 52399, 52401 (Aug. 7. 1980) as                 
               amended by 48 Fed. Reg. 33320, 33322 (Jul. 21, 1983).]                 
          Petitioners maintain that the month-to-month tenants of their               
          third floor units are analogous to “long-term boarders such as              
               Although proposed regulations carry no greater weight than a           
          position advanced on brief by respondent, they may be useful as             
          guidelines where they closely follow the legislative history of             
          the act.  Estate of Wallace v. Commissioner, 95 T.C. 525, 547               

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