Would you kindly help me to figure this one tax question out?

A) Got a house and mortgage is paid off completely. B) Got an office in that house. It is the ONLY office that I got. C) Need a room to do business in but decided not to rent room from another guy but use a room in my home for my business as it saves commute and gas and is better for the environment. D) If I would not use the room for business, I could rent it or let family use it. E) Can I rent it to myself? F) How can I deduct this room from the taxes? G) If I deduct it and sell the house one day, can I still sell it as private home or do I have to sell it as business house due to that I had a office inside and deducted something?

Thanks in advance for any advice you can spare.

Regards, Gene

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Gene
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See IRS Publications 587 and 523

Phil Marti Clarksburg, MD

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Phil Marti

Answers

E) Yes, but why? You'd just have to prepare Schedule E then with the same issues as Schedule C. F) See E G) You will have to handle the recapture of the allowed/allowable depreciation later.

You will likely find that your situation is one best referred to a tax preparer who is familiar with home-based business issues.

Reply to
parrisbraeside

You can sell it as anything; it won't matter to the buyer whether you had an office in one room (other than physical wear pattern and the like). The taxes on sale will differ; the business space is depreciated, has that recaptured, and gain is taxable, while there are large exemptions for the residential part.

Seth

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Seth

Not a real reply, just a note - This is NOT me!

Gene E. Utterback, EA, RFC, ABA

Reply to
Gene E. Utterback, EA, RFC, AB

Yes, I am another Gene.

Thanks.

========================================= MODERATOR'S COMMENT:

- we didn't think so, but thanks for avoiding any confusion.

Reply to
Gene

Snipped

But we look so much alike here !

Gene E. Utterback, EA, RFC, ABA

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Gene E. Utterback, EA, RFC, AB

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