Neal N. and Ruby W. Viar - Page 14

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               The next issue is whether petitioners are entitled to                  
          certain deductions claimed on Schedule E in excess of amounts               
          allowed by respondent.  This issue is decided on a preponderance            
          of the evidence and without regard to the burden of proof.                  
               Respondent disallowed petitioners’ claimed Schedule E                  
          deductions for insurance and depreciation expenses with respect             
          to the Morningside Heights dwelling on the basis of section 280A.           
          Section 280A provides generally that, in the case of an                     
          individual or an S corporation, no deduction otherwise allowable            
          shall be allowed with respect to the use of a dwelling unit that            
          is used by the taxpayer during the taxable year as a residence,             
          except as otherwise provided in section 280A.  Section 280A(d)(1)           
          provides generally that a taxpayer is considered as using a                 
          dwelling unit as a residence if the taxpayer uses the unit for              
          personal purposes during the taxable year for the greater of 14             
          days or 10 percent of the number of days the unit is rented at a            
          fair value.  Section 280A(d)(2) defines use of a dwelling as                
          personal if it is used:                                                     

                    (A) for personal purposes by the taxpayer or any other            
               person who has an interest in such unit, or by any member of           
               the family (as defined in section 267(c)(4)) of the taxpayer           
               or such other person; [or]                                             
               *       *        *        *        *        *        *                 
                    (C) by any individual * * * unless for such day the               
               dwelling unit is rented for a rental which, under the facts            
               and circumstances, is fair rental.                                     

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