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In addition, section 280A(a) provides as a general rule that
“no deduction * * * 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.” However, section 280A(c)(1) sets forth the
following exceptions to the general rule:
SEC. 280A(c). Exceptions for Certain Business or
Rental Use; Limitation on Deductions for Such Use.
(1) Certain business use.--Subsection (a) shall
not apply to any item to the extent such item is
allocable to a portion of the dwelling unit which is
exclusively used on a regular basis--
(A) the principal place of business for
any trade or business of the taxpayer,
(B) 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, or
(C) in the case of a separate structure
which is not attached to the dwelling unit,
in connection with the taxpayer’s trade or
business.
In determining whether petitioner’s home was used
exclusively and regularly as his principal place of business,
there are several factors that militate against petitioner in
this case. First, petitioner was not required under his contract
with NOAA to perform his contract obligations at home. Second,
petitioner admitted at trial that he performed services under the
contract at NOAA’s offices from 35 to 40 percent of the time and
the remainder of his contract obligations were performed at home.
Third, employees of NOAA that petitioner trained were not
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Last modified: March 27, 2008