Tenant Who Deducted Rent as Business Expense Can’t Claim Primary Residence

Landlord sued to evict rent-stabilized tenant for nonprimary residence. The court ruled against landlord after a trial, finding that tenant lived in the subject apartment and not at his wife’s apartment elsewhere in the city. Although there was conflicting documentary evidence, the court gave credit to testimony that tenant had a “nontraditional” relationship with his wife. Landlord appealed and won. Tenant deducted 100 percent of the rent for the subject apartment as a business expense for his company on federal tax returns filed during the two-year period before landlord brought the eviction proceeding. IRS instructions allow a deduction only for a portion of a home used “exclusively” as a place of business. Tenant’s position that the subject apartment was his primary residence is contrary to the declarations made under penalties of perjury on his income tax returns that the apartment was used exclusively for business purposes. 

Goldman v. Davis: 49 Misc.3d 16, 2015 NY Slip Op 25310 (App. T. 1 Dept.; 9/11/15; Lowe III, PJ, Hunter Jr., Ling-Cohan, JJ)