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transfer is that petitioners thereafter sought to deduct
substantial personal living expenses incurred in connection with
the property, such as insurance, repairs, maintenance, and
utilities. They even commenced a remodeling project at the
Quailwoods location, and nothing in the record indicates that the
resulting improvements did not enhance petitioners’ personal use
of the property for residential purposes. Attempts to legitimize
deductions of this nature through designation of the property as
HGAMC’s “headquarters” are unavailing. A passing reference by
petitioners on brief to a home office likewise does nothing to
aid their cause. Deductions related to business use of a
residence are strictly circumscribed by the rules of section 280A
and would require petitioners to show, at minimum and as relevant
here, that some portion of the home was “exclusively used on a
regular basis” for business. Sec. 280A(c)(1). The evidence
before the Court does not even so much as suggest that to be the
case.
As regards income-producing activities, again no truly
material change appears to have been worked by implementation of
the trust system. Petitioners’ primary contention in arguing for
a changed relationship centers on this aspect and is summarized
on brief as follows:
The allegation that the taxpayers’ relationship as
grantor to the property did not differ materially
before and after the creation of the trusts is
ludicrous. There was no substantial trust property
(aside from the Richardsons’ home) before the creation
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