Re: home office deduction
- From: Romy <Romy.22pzal@xxxxxxxxxx>
- Date: Sat, 4 Feb 2006 13:09:05 -0600
Su -- I take it for both DH and I as we both have offices. I take 13% of
the house and he takes 9% based on square footage of the offices versus
the entire home. In addition to the items all the others said you can
also take a percentage of garbage collection and insurance charges in
addition to your utilities. I've never taken any remodeling changes
unless they were directly related to the room in question in which case
I took 100% of those charges.
It's hard to believe what they're going after you for in New York
State. I know big brother watches us all, and it's gonna get worse as
time goes on, but as New Yorkers there's a line on our state income tax
where we're supposed to claim all items we bought out of state or over
the internet where we didn't pay New York State sales tax, and cough up
the money to the state. I wonder how high that compliance rate is?
Still, when I run up to New Hampshire, as I do a couple of times a
year, I always think I should not be using a credit card on those
purchases as it's only a matter of time until their tracking systems
get real sophisticated.
Su Wrote:
I got this from www.irs.gov
Paying Taxes on the Home Office Share When You Sell Your Home
When you sell your home, the home office may be considered business
property, and that portion of your gain on the sale may be taxed,
because
business property does not qualify for exclusion from income tax, as a
personal residence gain. This situation can occur if you use your home
for
business in the year of the sale, or if you don't meet the "two-year
test"
(in which 100% of the residence was used as your main home for an
aggregate
of 730 days in the last five years). If this applies to you, you must
treat
the sale of your home as two transactions: one as the sale of business
property and the other as the sale of your personal residence. The sale
of
business property is a taxable transaction that you must report, and
unfortunately, any gain that results isn't eligible for the $250,000
home
sale gain exclusion.
If you own your home, any depreciation taken after May 6, 1997 must be
"recaptured" at the time you sell your residence for a profit, which
means
that the depreciation must be taxed at a special 25% rate. The rest of
any
gain that you have from the sale of the business portion of your home
will
generally be taxed at 20% (assuming you owned the home for more than a
year).
So, according to this there's no problem claiming the home office
deduction
until a year or two before you sell your home. After that time, you
should
stop.
What's the general concensus here about claiming the home office
deduction?
Do you do that? Have you sold a home and had to repay the IRS any
money?
--
Romy
.
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