New Home purchase-business office tax deductible?

Question

I am purchasing a new home. 5% of the new home will be my business office. Can I take a tax deduction for 5% of the total home purchase price or any portion of the price paid?

Michael Plaks · Answer

@Joe R.

Before doing any calculations, your home office should qualify (used exclusively for business) and your business should qualify (be profitable after all expenses).

You can then deduct either 5% of all house-related expenses (mortgage interest, taxes, insurance, repairs, utilities, and depreciation of the purchase price) or $5 per square foot.

My explanation is very superficial, and there are many more rules and gotchas.

Lance Lvovsky · Answer

@Joe R.

You can’t deduct purchase price but you can depreciate. Certain other annual expenses can be deducted such as taxes, insurance, etc. as mentioned above, speak to your CPA.

Dominick Austria · Answer

No, you cannot deduct the price of the home. Depending on the structure of your business you will be able to deduct some expenses. Talk to your CPA about what you can and can't deduct.

New Home purchase-business office tax deductible?

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