Originally Posted by tomdon0783
My question is whether I can write off the building materials for the office and if so do I have to declare it as an office on my tax return and when I go to sell the house in the future. I live in Illinois.
Thanks for your time.
It depends; aslongas you use part of your home for your business, you may be able to deduct expenses for the business use of your home. There are two basic requirements for your home to qualify as a deduction:first, you must regularly use part of your home exclusively for conducting business. For example, if you use an extra room to run your business, you can take a home office deduction for that extra room; ALSO, you must show that you use your home as your principal place of business. You neeed to regularly conduct business, you may qualify for a home office deduction. For example, if you have in-person meetings with patients, clients, or customers in your home in the normal course of your business, even though you also carry on business at another location, you can deduct your expenses for the part of your home used exclusively and regularly for business. So, You can deduct expenses for the basement if you use it exclusively and regularly for your business. Generally, deductions for your home office are based on the percentage of your home devoted to business use. So, if you use a whole room or part of a room for conducting your business, you need to figure out the percentage of your home devoted to your business activities.Aslongas you use regular method, must determine the actual expenses of the home office. These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation. Generally, when using the regular method, deductions for your home office are based on the percentage of your home devoted to business use. So, as said, if you use a whole room or part of a room for conducting your business, you need to figure out the percentage of your home devoted to your business activities.
Note; for taxable years starting on, or after, Jan 1, 2013 (filed beginning in 2014), you now have a simpler option for computing the business use of your home.Unlike the standard method that has some calculation, allocation, and substantiation requirements that are complex and burdensome for small business owners , The new simplified option can significantly reduce recordkeeping burden by allowing a qualified taxpayer to multiply a prescribed rate by the allowable square footage of the office in lieu of determining actual expenses.