Commissioner v. Soliman
Encyclopedia
Commissioner v. Soliman, 506 U.S. 168 (1993), was a case heard before the United States Supreme Court in which the court decided whether a portion of a dwelling unit exclusively used as a principal place of business for any trade or business of a taxpayer would allow a deduction to the taxpayer's income taxes under Internal Revenue Code
Section 280A(c)(1)(A).
Soliman was an anesthesiologist who spent thirty to thirty-five per week with patients at three different hospitals but none of the hospitals provided him with an office. He used a spare bedroom in his house for contacting patients and surgeons, maintaining billing records, preparing for treatments, and reading medical journals.
The Supreme Court denied Soliman's home office deduction setting forth a two consideration test for whether the home was the taxpayer's principal place of business: (1) the relative importance of the activities performed, and (2) time spent at each place.
Congress's reaction to this decision was to amend Section 280A(c) in the Taxpayer Relief Act of 1997
so that a home office could meet the "principal place of business" test if it is the only fixed location where administrative or management activities are performed. This effectively nullified the Supreme Court's decision ruling in the Soliman case.
Internal Revenue Code
The Internal Revenue Code is the domestic portion of Federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large, and separately as Title 26 of the United States Code...
Section 280A(c)(1)(A).
Soliman was an anesthesiologist who spent thirty to thirty-five per week with patients at three different hospitals but none of the hospitals provided him with an office. He used a spare bedroom in his house for contacting patients and surgeons, maintaining billing records, preparing for treatments, and reading medical journals.
The Supreme Court denied Soliman's home office deduction setting forth a two consideration test for whether the home was the taxpayer's principal place of business: (1) the relative importance of the activities performed, and (2) time spent at each place.
Congress's reaction to this decision was to amend Section 280A(c) in the Taxpayer Relief Act of 1997
Taxpayer Relief Act of 1997
The Taxpayer Relief Act of 1997 reduced several federal taxes in the United States.Subject to certain phase-in rules, the top capital gains rate fell from 28% to 20%. The 15% bracket was lowered to 10%....
so that a home office could meet the "principal place of business" test if it is the only fixed location where administrative or management activities are performed. This effectively nullified the Supreme Court's decision ruling in the Soliman case.