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business purposes, while petitioners contend that creation of a
“trophy house” generates an ordinary and necessary business
expense akin to an outlay for marketing, promotion, or
advertising. Respondent then goes on to argue that,
additionally, the standards for deductibility under section 280A
must be met but are not on these facts. Petitioners, in
contrast, maintain that section 280A does not apply. Their
position is: “Respondent’s reliance on �280A is misplaced for
the simple reason that that section deals with ‘use of a
dwelling,’ meaning use of a dwelling as a facility, not use of a
dwelling as a trophy house aka billboard in lieu of money spent
for highway billboard or other media purchases, such as radio,
t.v. and newsprint.”
Because the Court concludes that section 280A is applicable
to petitioners’ situation and that petitioners fail to meet the
requirements imposed therein, we find it unnecessary to probe
further the intricacies of sections 162 and 167. Even assuming
arguendo that the improvements could be considered sufficiently
business-related in a multilevel marketing enterprise such as
petitioners’ to support deductibility under section 162 or 167,
section 280A precludes allowance.
The test of section 280A(a) states the following general
rule: “Except as otherwise provided in this section, in the case
of a taxpayer who is an individual or an S corporation, no
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