- 11 -
(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
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011