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Section 212 provides a deduction for all ordinary and
necessary expenses paid or incurred with respect to management,
conservation, and maintenance of property held for the production
of income, including real property rental. See also sec. 1.212-
1(h), Income Tax Regs. However, because the record is void of
adequate receipts or records that would substantiate petitioners’
claimed expenses, petitioners are not entitled to deductions in
excess of the amount already conceded by respondent.
Office in the Home Expenses
Petitioners claim that they are entitled to a deduction for
maintaining an office in their home. Section 280A(a) prohibits
deductions “with respect to the use of a dwelling unit which is
used by the taxpayer during the taxable year as a residence.”
Nonetheless, taxpayers may deduct expenses attributable to the
business use of their home if they qualify under one of the
exceptions to this prohibition. Section 280A(c)(1) provides:
SEC. 280A. DISALLOWANCE OF CERTAIN EXPENSES IN
CONNECTION WITH BUSINESS USE OF HOME, RENTAL OF
VACATION HOMES, ETC.
(1) Certain Business Use.--Subsection (a)
shall not apply to any item to the extent such
item is allocable to a portion of the dwelling
unit which is exclusively used on a regular
basis--
(A) [as] the principal place of business
for any trade or business of the taxpayer,
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Last modified: May 25, 2011