[Federal Register Volume 59, Number 97 (Friday, May 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-12293]


[[Page Unknown]]

[Federal Register: May 20, 1994]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[IA-023-93]
RIN 1545-AR80

 

Deductibility of Expenses Attributable to Business Use of a 
Dwelling Unit Used as a Residence

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Partial withdrawal of a notice of proposed rulemaking.

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SUMMARY: This document withdraws a portion of the notice of proposed 
rulemaking under section 280A of the Internal Revenue Code that was 
published in the Federal Register on July 21, 1983. That notice 
concerns the requirements for deductibility of expenses in connection 
with the business use, or the rental to others, of a dwelling unit that 
the taxpayer is deemed to have used for personal purposes during the 
taxable year.

DATES: This notice is effective on May 20, 1994.

FOR FURTHER INFORMATION CONTACT: Marilyn E. Brookens, (202) 622-1585 
(not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    On August 7, 1980, the IRS published in the Federal Register (45 FR 
52399) a notice of proposed rulemaking under Internal Revenue Code 
(Code) section 280A relating to the deductibility of expenses in 
connection with the business use, or the rental to others, of a 
dwelling unit that the taxpayer is deemed to have used for personal 
purposes during the taxable year. On July 21, 1983, the IRS published 
in the Federal Register (48 FR 33320) a notice of proposed rulemaking 
containing amendments to those proposed rules.
    Section 280A(c)(1)(A) of the Code permits the deduction of certain 
expenses relating to the business use of the home if part of the home 
is exclusively used on a regular basis as the principal place of 
business for any trade or business of the taxpayer. Proposed 
Sec. 1.280A-2(b)(2), as amended, provides that a taxpayer is deemed to 
have a principal place of business for each trade or business in which 
the taxpayer engages. In Commissioner v. Soliman, 113 S. Ct. 701 
(1993), the United States Supreme Court noted that, in some cases, 
there may be no principal place of business. Thus, the Service is 
hereby withdrawing proposed Sec. 1.280A-2(b)(2), as amended.
    Proposed Sec. 1.280A-2(b)(3), as amended, sets forth three factors 
to be taken into account in determining the location of a taxpayer's 
principal place of business when the taxpayer engages in a single trade 
or business at more than one location. The Supreme Court in Soliman 
identified two primary factors for determining whether a taxpayer's 
home is the principal place of business in circumstances where the 
taxpayer engages in the activities of a business at more than one 
location. Because the two factors identified by the Supreme Court 
differ from the three factors set forth in proposed Sec. 1.280A-
2(b)(3), as amended, the IRS is hereby withdrawing proposed 
Sec. 1.280A-2(b)(3), as amended.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Withdrawal of Portion of Notice of Proposed Rulemaking

    Accordingly, under the authority of 26 U.S.C. 7805, proposed 
Secs. 1.280A-2(b)(2) and (b)(3), that were published in the Federal 
Register (48 FR 33320, at 33324) on July 21, 1983, are withdrawn.
Michael P. Dolan,
Commissioner of Internal Revenue.
[FR Doc. 94-12293 Filed 5-19-94; 8:45 am]
BILLING CODE 4830-01-U