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section 280A an exception for establishments that reach a certain
size or commercial level, petitioners would in effect grant to
taxpayers owning large hotels deductions that would be prohibited
to owners of small hotels simply by virtue of the disparity in
the size or commercial nature of their respective hotels.
Section 280A(f)(1)(B) specifically refers to hotels and in
so doing does not place any limitation on the size or nature of
the hotel. The narrow reading by petitioners of section
280A(f)(1)(A) is not consistent with the statutory language.
Even if petitioners’ legal argument had validity, which it
does not, the facts herein are quite different from petitioners’
extreme hypothetical situation. Nearly one quarter of
petitioners’ moderately sized bed and breakfast inn is used
exclusively or partially for personal purposes.
If we find that section 280A is applicable to petitioners’
Inn, in the alternative petitioners argue that their business use
of the dual-use portion of the Inn should be treated as used
exclusively in the business of operating a bed and breakfast and
therefore as qualifying for business deductions under the Hotel
Exception of section 280A(f)(1)(B).
Petitioners misread the exclusive-use rule of the Hotel
Exception. Thereunder, as explained, only the portion of
petitioners’ Inn used solely and exclusively in the business of
operating the bed and breakfast is treated as business property.
The dual-use portion of the Inn, because it was used partially
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