Tax Form 8829 Help

Figure Your Allowable Deduction: form 8829 Part II

Expenses for your business use of home deduction are reported as either direct expenses or indirect expenses.

Direct expenses are fully deductible because they are derived solely from the part of the home used for business.

Examples of direct expenses include refinishing the floor and painting the part of your home used for business.

Indirect expenses are those expenses that result from your entire home. Only a portion of these expenses can be applied to the part of your home used for business and, therefore, they are only partially deductible. Indirect expenses include rent, home mortgage interest, real estate taxes, and furnace and roof repairs.

Depreciation of Your Home: form 8829 - Part III

When can depreciation be used as a tax deduction?

Depreciation can be used as a deduction only if you own the property.

How to deduct depreciation?

Determine your home's adjusted basis or its fair market value.

Enter the smaller of the tow on line 36 of Form 8829.

Enter the value of your land on line 37.

The business basis of your building (line 39) is calculated by multiplying the basis of your building (line 38) by the business percentage (line 7).

The depreciation percentage (line 40) is determined by how long you have operated your business in your home and not by how long you have owned your home. Shown on the following page is a table that gives the depreciation percentages for the time you first used your home for business.

<< Previous    1  [2]  3    Next >>