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On a related point, petitioners’ contention that the
deductions at issue should be allowed notwithstanding section
280A because the house functions as a “trophy house” or
“billboard” and could be characterized as marketing, promotion,
or advertising is essentially a claim that the applicability of
section 280A should turn on the type of business use to which the
otherwise residential property is put. This position has been
rejected in words that ring true here:
Section 280A provides a broad general rule
requiring disallowance of deductions attributable to
the business use of a personal residence, irrespective
of the type or form of business use. It is true that
the potential for abuse in this area was typified by
the situation where a taxpayer would make a dubious
claim for a home office deduction. * * * Unfortunately
for the petitioners here, the words of the law which
Congress passed are straightforward and much broader in
their applicability--sufficiently broad as to catch
petitioners in their net. We are not, therefore, at
liberty to “bend” the law, much as we may sympathize
with petitioner’s position. [Baie v. Commissioner,
supra at 110; emphasis added.]
As regards exceptions under section 280A(c), the record does
not show, and indeed petitioners have never claimed, that any are
met here.5 No portion of the residence was used exclusively for
business. Hence, neither petitioners nor any of their related
entities are entitled to deductions for the capitalized residence
improvements.
5 Petitioners state on brief: “Never have Petitioners
claimed that (a) their home was a place of business, or (b) that
use by distributors was exclusive.”
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