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  1. #1
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    January 18th, 2005
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    I have been counting my home office for around 4 of the 5 years I have owned my home. Recently an offer was made to me to purchase my home that I am finding hard to refuse.
    I remember reading that there are some consequences when selling your home after taking a home office deduction..but I don't remember specifically what they are.
    Does anyone know the tax consequences? Do those of you here count your office as a deduction?

    Thanks

    Bill

  2. #2
    ABW Ambassador Jane's Avatar
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    January 18th, 2005
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    If you are writing off 10% of your home as a business expense then if I remember correctly .. When you sell the house 10% will be considered as business income. This is the reason I don't take an office deduction.

  3. #3
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    January 18th, 2005
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    I believe the IRS has changed that. You no longer have to deal with paying a capital gain tax on the percentage of the home used for business.

    They will still require you to pay taxes on any depreciation deductions taken.

  4. #4
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    As I recall, its called recapture. You've taken depreciation of an asset, namely, the portion of your home devoted to business, and will have sold that along with the entire home.

    Thus, the depreciation you claimed would be "recaptured" and would become taxable business income (Schedule C).

    I would check this with your CPA or other tax advisor, however.

    "If I'd known I was going to live this long, I'd have taken better care of myself." Bob Hope

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