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Section 280A(a) provides as a general rule that no deduction
otherwise allowable to an individual “shall be allowed with
respect to the use of a dwelling unit which is used by the
taxpayer during the taxable year as a residence.” As 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).
Petitioners claimed Schedule C deductions for eight checks
written to their daughter Anita. We conclude, largely on the
basis of Agent O’Dell’s interview with Anita on September 6,
1995, that such checks to Anita were gifts of money and supplies
for her college work. The checks to Anita were not properly
deductible as business expenses.
Petitioners also claimed Schedule C deductions on their
joint 1991 and 1992 returns for payments to their two young
children, Dominique and Jonathan. Petitioners contend that
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Last modified: March 27, 2008