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(1) as the principal place of business for any trade or
business of the taxpayer (sec. 280A(c)(1)(A));
(2) as a place of business used by patients, clients, or
customers in meeting or dealing with the taxpayer in the normal
course of his trade or business (sec. 280A(c)(1)(B)); or
(3) in the case of a separate structure which is not
attached to the dwelling unit, in connection with the taxpayer's
trade or business (sec. 280A(c)(1)(C)).
Where a taxpayer's business is conducted in part in the
taxpayer's residence and in part at another location, the
following two primary factors are considered in determining
whether the home office qualifies under section 280A(c)(1)(A) as
the taxpayer's "principal" place of business: (1) The relative
importance of the functions or activities performed at each
business location, and (2) the amount of time spent at each
location. Commissioner v. Soliman, 506 U.S. 168, 175-177 (1993).
Whether the functions or activities performed at the home
office are necessary to the business is relevant but not
controlling, and the location at which goods and services are
delivered to customers generally will be regarded as the
principal place of a taxpayer's business. Id. at 176. The
relative importance of business activities engaged in at the home
office may be substantially outweighed by business activities
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Last modified: May 25, 2011