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realize income on his speculative writings for years after they
are completed. In essence, petitioners contend that section 280A
departs from the traditional principle of matching income and
expenses and that the application of that section is
unconstitutionally unfair to authors of speculative works.
Section 280A applies to all taxpayers and treats speculative
authors no differently from all other citizens who maintain
offices in their residences. Cook v. Commissioner, T.C. Memo.
1997-378. Moreover, section 280A(c)(5) contains a carryover
provision for disallowed deductions. The Court rejects
petitioners’ constitutional arguments. Respondent is sustained
with respect to the application of section 280A(c)(5). As noted
earlier, the limitation provisions of section 280A(c)(5) are not
applicable to petitioners’ expenses relating to the North Indian
Avenue and Ravenspur offices.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011