In short
A self-employed person can deduct expenses for part of a home used regularly and exclusively as the principal place of business, or to meet clients. Employees can't, because unreimbursed employee expenses are no longer deductible.
Key takeaways
- The simplified method allows $5 per square foot for up to 300 square feet ($1,500).
- Under the regular method, the deduction can't exceed the business's income, with the excess carried forward.
- Depreciation claimed on the office is taxed on sale of the home and isn't covered by the home sale exclusion.
Where it's tested
TCP: Individual Tax Planning Strategies — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A taxpayer sells stock at a $10,000 loss on December 10 and repurchases the same stock on December 28 of the same year. What is the tax result?