Steven K. Stoddard and Ellen M. Stoddard - Page 26

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          respondent contends that petitioners are not entitled to the                
          claimed rental expense deductions for 1997 because petitioners              
          have failed to establish that those deductions are not disallowed           
          by section 280A.                                                            
               Section 280A(a) provides:                                              
               SEC. 280A.  DISALLOWANCE OF CERTAIN EXPENSES IN                        
                    CONNECTION WITH BUSINESS USE OF HOME,                             
                    RENTAL OF VACATION HOMES, ETC.                                    
                    (a) General Rule.--Except as otherwise provided in                
               this section, in the case of a taxpayer who is an                      
               individual * * *, no deduction otherwise allowable                     
               under this chapter shall be allowed with respect to the                
               use of a dwelling unit which is used by the taxpayer                   
               during the taxable year as a residence.                                
               Section 280A(b) provides:                                              
                    (b) Exception for Interest, Taxes, Casualty                       
               Losses, Etc.–-Subsection (a) shall not apply to any                    
               deduction allowable to the taxpayer without regard to                  
               its connection with his trade or business (or with his                 
               income-producing activity).                                            
               A “dwelling unit” is defined to include a house, apartment,            
          condominium, or similar property.  Sec. 280A(f)(1)(A).  On the              
          record before us, we find that the Doon Way residence constitutes           
          a dwelling unit within the meaning of section 280A.                         

          claimed as a deduction for each such category in Schedule E of              
          their 1997 joint return.  Although petitioners did not claim                
          rental expense deductions in their 1997 joint return for legal              
          fees, supplies, and automobile and travel, petitioners introduced           
          into the record at trial certain checks in an attempt to estab-             
          lish that during 1997 they incurred certain expenses for each               
          such category of expense.  It is not clear whether respondent is            
          conceding the total amount of rental expenses that petitioners              
          claimed in Schedule E of their 1997 joint return or some other              
          amount.  In any event, in light of our findings below, we need              
          not decide the exact amount of rental expenses that respondent              
          concedes petitioners paid during 1997.                                      

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