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legislative grace and hence a taxpayer claiming a deduction must
come within the express provisions of the statute).
As relevant herein, section 280A(a) provides as a general
rule that no deduction otherwise allowable to an individual
“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.” The term “dwelling unit” is defined by section
280A(f)(1)(A) to specifically include an apartment. The statute
does not distinguish between a condominium apartment and a rental
apartment. In other words, whether owned or rented, an apartment
is a dwelling unit within the intendment of the statute. See
Horton v. Commissioner, T.C. Memo. 1997-572 (involving an artist
who rented premises in a commercially zoned area, which premises
were found by the Court to be a dwelling unit within the scope of
section 280A).
The seemingly prohibitory rule of section 280A(a) is
ameliorated by section 280A(c), which provides exceptions for
certain business uses. As relevant herein, section 280A(c)(1)
provides that the general rule of section 280A(a) is not
applicable to any item to the extent it:
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, [or]
(B) as a place of business which is used by
patients, clients, or customers in meeting or
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Last modified: May 25, 2011