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dealing with the taxpayer in the normal course of
his trade or business * * * .
The liberalizing effect of section 280A(c) is not without
its limitations, however. In particular, and as relevant herein,
section 280A(c)(5) limits a taxpayer's deductions for the
business use of an apartment to the amount by which the gross
income generated from the business activity conducted in the
apartment exceeds the deductions for expenses attributable to
such activity that are not allocable to the business use of the
apartment itself. See Martin v. Commissioner, T.C. Memo. 1996-
503, affd. per curiam without published opinion 155 F.3d 559 (4th
Cir. 1998). In other words, no deduction for use of an apartment
may be claimed if said deduction would give rise to, or increase,
a net loss from the business to which the deduction relates. Id.
The foregoing exegesis of section 280A(c)(5) is confirmed by
the legislative history of the most recent relevant amendment to
that section. Thus:
Reasons for Change
Limitations on deduction
* * * * * * *
The committee believes that a home office deduction to
which section 280A applies should not be used to reduce
taxable income from the activity to less than zero. In
adopting the provisions of the bill, the committee
reemphasizes that section 280A was enacted because of
concerns about allowing deductions for items which have
a substantial personal component relating to the home,
which most taxpayers cannot deduct, and which
frequently do not reflect the incurring of
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