Opinion ID: 467499
Heading Depth: 2
Heading Rank: 1

Heading: 1977 Rental Expenses

Text: 5 The Christensens claimed a 1977 loss of $8,520 for their rental house in Campton, New Hampshire. After finding that the Christensens used the house as a residence as defined by section 280A(d) of the Internal Revenue Code, 26 U.S.C. Sec. 280A(d) (1982), the Commissioner limited the Christensens' deduction for expenses to the rental income received. Section 280A provides that only a few specified deductions are allowed with respect to the use of a dwelling unit which is used by the taxpayer during the taxable year as a residence. Section 280A(d) defines the term residence: 6 (d) Use as residence 7 (1) In general 8 For purposes of this section, a taxpayer uses a dwelling unit during the taxable year as a residence if he uses such unit (or portion thereof) for personal purposes for a number of days which exceeds the greater of-- 9 (A) 14 days, or 10 (B) 10 percent of the number of days during such year for which such unit is rented at a fair rental. 11 For purposes of subparagraph (B), a unit shall not be treated as rented at a fair rental for any day for which it is used for personal purposes. 12 (2) Personal use of unit 13 For purposes of this section, the taxpayer shall be deemed to have used a dwelling unit for personal purposes for a day if, for any part of such day, the unit is used-- 14 (A) for personal purposes by the taxpayer or any other person who has an interest in such unit, or by any member of the family. 15 Under Section 280A(d), the Christensens would be disqualified from deducting certain expenses if they had used the house for personal purposes for more than seventeen days during the year. (The house was rented for 162 days in 1977.) While the Christensens contend they used the house for no more than eleven days, the Tax Court found that the house was used for personal purposes during all of January. 16 This finding by the Tax Court is a question of fact and is subject to the clearly erroneous standard of review. Peck v. Commissioner, 752 F.2d 469, 472 (9th Cir.1985). The prior decision by the Commissioner to disallow deductions  'has the support of a presumption of correctness, and the petitioner has the burden of proving it to be wrong.'  Kalgaard v. Commissioner, 764 F.2d 1322, 1323 (9th Cir.1985) (quoting Welch v. Helvering, 290 U.S. 111, 115, 54 S.Ct. 8, 9, 78 L.Ed. 212 (1933)). Petitioners did not carry this burden and the Tax Court's decision is supported by substantial evidence. The Christensens' employer's records and expense vouchers indicate that the Christensens maintained a regular presence in the Campton house during January. An IRS agent testified that the Christensens had admitted residing in the house until the end of January. A factfinder may choose to discount a party's self-interested testimony, and the Tax Court chose to give less weight to the Christensens' allegations that they resided elsewhere in January. Although there is evidence that the Christensens lived in the house less than seventeen days, there was substantial trial evidence to the contrary. No clear error is apparent in the Tax Court's finding.