90 STAT. 1570
PUBLIC LAW 94-455—OCT. 4, 1976
business corporation, no deduction otherwise allowable under t h i s chapter shall be allowed with respect to the use of a dwelling unit which is used by the tax p a y e r during the taxable year as a residence. "(b)
EXCEPTION FOR INTEREST, TAXES, CASUALTY LOSSES, E T C. — S u b -
section (a) shall not apply to any deduction allowable to the taxpayer without regard to its connection with his trade or business (or with his income-producing activity). " (c) EXCEPTIONS FOR CERTAIN B U S I N E S S OR R E N T A L U S E; L I M I T A TION ON DEDUCTIONS FOR S U C H U S E. —
" (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) as the taxpayer's principal place of business, " (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. I n the case of an employee, the preceding sentence shall apply only if the exclusive use referred to in the preceding sentence is for the convenience of his employer. " (2) CERTAIN STORAGE USE.—Subsection (a) shall not a p p l y to
any item to the extent such item is allocable to space within the dwelling unit which is used on a regular basis as a storage u n i t for the inventory of the taxpayer held for use in the taxpayer's trade or business of selling products at retail or wholesale, b u t only if the dwelling unit is the sole fixed location of such trade or business. " (3) RENTAL USE.—Subsection (a) shall not apply to any item which is attributable to the rental of the dwelling unit or portion thereof (determined after the application of subsection (e)). " (4) LIMITATION ON DEDUCTIONS.—In the case of a use described
in paragraph (1) or (2), and in the case of a use described in paragraph (3) where the dwelling unit is used by the taxpayer during the taxable year as a residence, the deductions allowed under this chapter for the taxable year by reason of being attributed to such use shall not exceed the excess of— " (A) the gross income derived from such use for the taxable year, over " (B) the deductions allocable to such use which are allowable under this chapter for the taxable year whether or not such unit (or portion thereof) was so used. "(d)
U S E AS RESIDENCE.—
" (1) IN GENERAL.—For purposes of this section, a tax p a y e r uses a dwelling imit 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— " (A) 14 days, or " (B) 10 percent of the number of days during such year for which such Tinit is rented at a fair rental. 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. " (2) PERSONAL USE OF UNIT.—For purposes of this section, the tax p a y e r shall be deemed to have used a dwelling u n i t for per-
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