I don't believe that Curphey
is good law. The issue in Curphey
has not been revisited since IRC Sec. 469 was added (1986), concerning the passive activity rules for real estate professionals. It seems to me entirely inconsistent that Congress would have defined a trade or business for real estate professionals seeking material participation status as requiring 750 hours and 50% personal services during the year, while simultaneously permitting a non-real estate professional to take the home office deduction under IRC Sec. 280A, under the legal theory that the office is the taxpayer's "principle place of business."
A taxpayer who engages in passive real estate investment
has no principal place of business, because the taxpayer is not engaged in business -- the taxpayer is engaged in an investment. Curphey's references to supporting U.S. Supreme Court opinions predate the inclusion of IRC Sec. 469.
That said, the U.S. Supreme Court also issued a ruling in Commissioner v. Soliman, 506 U.S. 168 (1993), in which the court created a two-part test to determine whether or not a home office meets the "principal place of business" requirement:
- Where a taxpayer's business is conducted in part at a home office and in part at other locations, the following two primary factors are considered in determining whether the home office qualifies under sec. 280A(c)(1)(A) as the taxpayer's principal place of business: (1) The relative importance of the activities performed at each business location and (2) the amount of time spent at each location. Commissioner v. Soliman, 506 U.S. 168, 175-177 (1993).
There are two ways to look at the current legal landscape: Since the IRS has won substantially every single home-office-deduction-non-real-estate-professional case brought to the U.S. Tax Court since Curphey, perhaps the IRS doesn't believe it needs any additional ammo to prevail over anyone it deems is not clearly within the scope of the very complicated and highly discretionary rules created by Curphey and Soliman.
Or, maybe the IRS believes Curphey is good law, so it doesn't bother challenging any circumstance where it appears that a taxpayer appears to have managed to "thread the needle."
From where I'm sitting, you are about to engage in a business that's quite different from any of the previous cases. If you want to go with the Curphey decision as giving you license to deduct your home office as the place of business for your vehicle activities, that's your decision. But, the question may arise as to where most of this business is done -- in your office, or in your warehouse. And, the IRS could turn the entire table around on you and try to show that you are engaged in a non-rental-real estate business, and that this is all ordinary income, subject to self-employment tax.
All of this is way to dicey for me. I would just form an S Corp., pay myself a small salary, and then operate the business as a vehicle storage operation, not as rental real estate.
Choice is yours. I've done my best to explain the law. Best wishes.