Joseph A. Morcos and Joann M. Morcos - Page 12

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          (1990), affd. 965 F.2d 1038 (11th Cir. 1992); Miller v.                     
          Commissioner, 70 T.C. 448, 460 (1978); F.W. Woolworth Co. v.                
          Commissioner, 54 T.C. 1233, 1265-1266 (1970)).  The facts of                
          petitioners’ case, considered in light of the statute and                   
          regulation proposed thereunder, do not justify the conclusion               
          that petitioners used any portion of their home exclusively as a            
          “hotel, motel, inn, or similar establishment.”                              
               Petitioners advertised the availability of the third floor             
          units in the newspaper under the heading “House to Share”.                  
          Petitioner testified that their month-to-month tenants during the           
          years in issue leased the units for 2 to 3 years.  Nothing in the           
          record suggests that petitioners operated a commercial operation            
          such as a hotel, motel, inn, or similar establishment.  Rather,             
          the record indicates that petitioners rented rooms in their house           
          to offset their living costs.  Moreover, the adoption of                    
          petitioners’ broad interpretation of section 280A(f)(1)(B) would            
          frustrate the purpose of section 280A.                                      
               As such, petitioners are subject to the limitation of                  
          section 280A(c)(5) with respect to the rental of the third floor            
          units of their main house.  Petitioners, thus may deduct expenses           
          to the extent of the excess of the gross income derived from such           
          use for the taxable year over the sum of:  (1) The deductions               
          allocable to the rental use that are otherwise allowable                    
          regardless of such rental use (such as mortgage interest and real           

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