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property was remodeled to become more grandiose, but it still
included a living room, dining room, family room, bedrooms,
bathrooms, etc. Petitioners slept there, ate there, and had free
access to all areas of the home, gardens, and amenities such as
the pool. Their grandchildren visited and could go anywhere they
pleased. Petitioners entertained guests other than distributors
at the property. Accordingly, 4627 East Foothill Drive was a
dwelling unit used by petitioners as a residence within the
meaning of section 280A.
Because section 280A applies, no deduction is allowed under
“this chapter” unless one of the enumerated exceptions is
satisfied. “This chapter” refers to chapter 1, Normal Taxes and
Surtaxes, of the Internal Revenue Code and includes both sections
162 and 167, which are contained in part VI of subchapter B of
chapter 1. Petitioners’ apparent suggestion that they can avoid
the strictures of section 280A by meeting the requisites of
section 162 or 167 and their reliance on cases involving tax
years prior to the enactment of section 280A are unfounded.
As this Court has explained:
Section 280A was added to the Internal Revenue
Code by the Tax Reform Act of 1976 to provide
“definitive rules relating to deductions for expenses
attributable to the business use of homes.” S. Rept.
94-1236 (1976), 1976-3 C.B. (Vol. 3) 807, 839. Prior
to the enactment of section 280A, this Court had
allowed a deduction for an office in an employee’s
residence on the grounds that the maintenance of such
office was “appropriate and helpful” under the
circumstances. Congress felt that clear-cut rules
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