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(A) the gross income derived from such use for
the taxable year, over
(B) the sum of-–
(i) the deductions allocable to such use
which are allowable under this chapter for the
taxable year whether or not such unit (or
portion thereof) was so used, and
(ii) the deductions allocable to the trade or
business (or rental activity) in which such use
occurs (but which are not allocable to such use)
for such taxable year.
Any amount not allowable as a deduction under this chapter
by reason of the preceding sentence shall be taken into
account as a deduction (allocable to such use) under this
chapter for the succeeding taxable year. Any amount taken
into account for any taxable year under the preceding
sentence shall be subject to the limitation of the 1st
sentence of this paragraph whether or not the dwelling unit
is used as a residence during such taxable year.
This Court has held on several occasions that the home office
deduction of a writer is limited to the gross income from
writing. Gestrich v. Commissioner, 74 T.C. 525 (1980); Warganz
v. Commissioner, T.C. Memo. 1981-403, affd. without published
opinion 696 F.2d 987 (3d Cir. 1982); Parker v. Commissioner, T.C.
Memo. 1984-233.
Section 280A(c)(5) thus limits petitioners’ deduction of
their office expenses attributable to the Vista Loma and Deepak
addresses. Their deduction is limited to the amount of
petitioners’ gross income derived from Mr. Radnitz’s use of the
home offices reduced by the deductions allowable without regard
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