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relevant herein, section 280A(c)(1) provides that the general
rule of section 280A(a) is not applicable to any item to the
extent it is allocable to a portion of the dwelling unit which is
exclusively used on a regular basis as the principal place of
business for any trade or business of the taxpayer, or as a place
of business which is used by patients, clients, or customers in
meeting or dealing with the taxpayer in the normal course of his
trade or business. Expenses deducted as a business use of home
must be deductible under section 162 or some other Code section.
See sec. 280A(a).
Petitioner testified that he used his basement as his home
office. The evidence and testimony available do not indicate
that petitioner met with clients or customers in his basement.
Therefore, petitioner’s deductions for business use of home can
only be sustained if he used the basement on a regular basis as
the principal place of business for a trade or business.
Petitioner argues that an income statement, which lists
operating expenses and which he testified had been created by
BMS, was created from a log petitioner kept of his expenses and
was averaged over the year. Petitioner argues that this income
statement is sufficient to substantiate his business use of home
expenses. Petitioner testified that from January 2001 to
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Last modified: May 25, 2011