- 9 - In Grigg v. Commissioner, 979 F.2d 383, 385-386 (5th Cir. 1992), affg. T.C. Memo. 1991-392, in which the taxpayer, similar to the taxpayer in Byers v. Commissioner, supra, used a condominium for part of the year as a rental and for part of the year as a personal residence, the Court of Appeals, in dicta, stated that section 280A does apply to large hotels: [A] taxpayer may * * * [take deductions] for the entire portion of the hotel which is used solely for commercial purposes. The portion of the hotel which is used for personal use obviously does not fit the exception and therefore is a dwelling unit, subject to the provisions in section 280A. Thus, for example, if 98 units of a 100 unit hotel are used exclusively as a hotel and 2 units are used for personal reasons, the deductible expenses for the 98 units are excepted from section 280A and cannot be limited thereby since that portion of the hotel meets the requirements of the hotel exception. The other two units are dwelling units since the owner has not used them exclusively as a hotel. * * * [Fn. ref. omitted.] The purpose of section 280A is to prevent taxpayers from taking business deductions which in effect relate to personal living expenses. By reading into the statutory language of 2(...continued) taxpayer-owner of a 500-room hotel uses one of the suites as his personal residence and chooses each morning to read the newspaper in the hotel lobby. Petitioners argue that the taxpayer’s personal use of the lobby would be de minimis and should not result in the disallowance of business expenses relating to the hotel lobby. Respondent agrees that, “Arguably, merely reading a newspaper in a lobby does not rise to ‘use for personal purposes’” but cautions that “the owner might be wise to do his reading elsewhere”. Herein, we do not decide whether there is a de minimis exception to the exclusive-use limitation of sec. 280A(f)(1)(B).Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011