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Because petitioners' gross income was less than their
deductions for mortgage interest and taxes, petitioners must
carryover their other deductions to the following tax year, and
they are only deductible up to the amount of income generated by
the property. Sec. 280A(c)(5).1
Tax Year 2000
During 2000, petitioners used their property for 8 days and
rented it for 23 days for gross rentals of $1,500, or an average
of $65.21 per day. Because petitioners rented the property for
fair rental value during the year, their personal use did not
exceed the greater of 14 days or 10 percent of the days it was
rented at fair rental value during the year. Sec. 280A(d)(1).
Petitioners’ deductions are not limited under section 280A(a) for
2000 because their property was not used as a "residence" during
the year. Sec. 280A(a), (d)(1). Section 280A is not, however,
the only obstacle between petitioners and their claimed
deductions.
Section 183(a) generally provides that if an activity
engaged in by an individual is not entered into for profit, no
deduction attributable to the activity shall be allowed, except
as otherwise provided in section 183(b). An "activity not
engaged in for profit" means any activity other than one for
1Because sec. 280A(a) applies, sec. 183 does not. Sec.
280A(f)(3).
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Last modified: May 25, 2011