Paying taxes on home office depreciation... closing a home office (formerly self employed)

Nope. There's no sale of the home, so no gain to report for the home office. I'd be concerned about your furniture, fixtures, computers, etc where you took Section 179 expense over depreciation, as a change in use (from 100% business to 0% business use) would trigger a recapture of the excess Section 179 expense over regular depreciation.

-- Paul Thomas, CPA snipped-for-privacy@bellsouth.net

Thanks! I knew it didn't pass the common sense test, but the tax software was giving me an error for not reporting the home office on the 4797. I've got a handle on the 179 depreciation. I appreciate your assistance. Mark

When he eventually sells (say, in 3 years) is there any tax treatment for the depreciation, or does it get forgotten? Seth

When you sell the home, there will be a tax to pay on the home office depreciated part. It is not part of the $250,000/$500,000 exemption. State & local income taxes may also apply at the time of the sale. ___________________________________

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