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Home office/storage room IRS audit
Hey all. This year i got a dreaded letter from the irs asking to provide more information on my rental property. In own a 2 family with 3 rooms each. I live in one of the two apartments in 1 of the 3 units. The other two units i use for property related workspace where i keep all the tools and the other unit is pure storage for tools and supplies that im using to restore the damaged property. I do all of my repairs and theres just nowhere else that i could keep my tools so its digging into my bottom line. Unfortunately i had some horrendous tenants in 2019 that destroyed the apt and i was left with a need for storage and so i know it sounds like over kill but now im in a 3 unit apt where im claiming home office deductions for 2 of the three units. The irs would like to see cash flow from 5/6 total units but due to issues in 2019 now im only getting money on 3/6 i live in 1/6 and the remaining 2/6 are all storage and office space for tools and maintenance related equipment. Did i do something wrong or should i be worried