the 3 out of 5 rule is not contained in section 280A which controls business use of home, rental of vacation homes, etc. None of the court cases involving personal use of rental real estate ever mention or refer to IRC section 183 - Activities not engaged in for profit. This is the code section that contains the 3 out of 5 rule which can and has been successfully rebutted. The only rebuttal in cases involving 280A was whether the rent was fair. In one case the home was rented to the taxpayer's parents at a 20% discount. The court found that the parents were expected to take unusually good care of the property and management fees were avoided. thus the discounted rent was deemed fair rental value - Bindseil TC Meno 1983-411
