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26 U.S.C.S. § 280A(a) provides that no deduction is generally allowable with respect to the use of a dwelling unit used by the taxpayer during the taxable year as his residence.
Edward W. Andrews and his wife, Leona J. Andrews, brought this action in the Tax Court for a redetermination of an income tax deficiency that the Commissioner had assessed for the tax year 1984. At issue is Andrews' deduction of travel expenses, including meals and costs associated with maintaining a second home at Lighthouse Point, Florida, as "traveling expenses . . . while away from home in the pursuit of a trade or business." Internal Revenue Code of 1954, 26 U.S.C. § 162(a)(2). Personal living expenses are generally not deductible. 26 U.S.C. § 262. The Tax Court sustained the Commissioner's disallowance of the deduction on the grounds that Andrews was not "away from home" when these expenses were incurred. Andrews appealed to this court pursuant to 26 U.S.C. § 7482.
Did the tax court err in concluding that Andrews had two "tax homes" for purposes of allowable deductions for business reasons?
The court held that the tax court erred in basing its decision on an observation that Andrews’ business in Florida was recurrent with each season, rather than temporary. Further, the tax court's conclusion that Andrews had two "tax homes" was inconsistent with the well-settled policy underlying 26 U.S.C.S. § 162(a)(2) that duplicated living expenses necessitated by business were deductible. Thus, the matter was remanded for a determination of Andrews’ principal place of business.