Brush up on the home office deduction

Brush up on the Home Office Deduction You probably update your home on a regular basis. When was the last time you updated your understanding of the home office tax deduction? For instance, you may remember that, in the past, the part of your home used as... More

Brush up on the Home Office Deduction You probably update your home on a regular basis. When was the last time you updated your understanding of the home office tax deduction? For instance, you may remember that, in the past, the part of your home used as an office might not qualify for the home sale exclusion. If so, you ll be happy to know this changed years ago. Unless your office is in a separate building on your property, the exclusion of gain on the sale of your home ($250,000 for singles and $500,000 for married filing jointly) is generally available. Another rule that may need dusting off: Depreciation recapture. It s the term for having to pay tax on some or all of the depreciation deductions you took, or could have taken, for your home office. When you sell your house, those deductions decrease your basis and are subject to capital gains tax. In effect, you get a current deduction reducing ordinary income during the years you operate your home office. At the time of s Less