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I own a home with a basement rental apartment. What are the

tax implications if I stop...
I own a home with a basement rental apartment. What are the tax implications if I stop using it as rental property and start using it for a home office?
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Answered in 5 minutes by:
7/1/2012
Richard
Richard, Tax Attorney
Category: Tax
Satisfied Customers: 56,009
Experience: 29 years of experience as a tax, real estate, and business attorney.
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Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.

Good afternoon. The tax benefits are basically the same on the deduction side; on the revenue side, you obviously will now not have the rental income. You will now report the deductions on Schedule C rather than Schedule E, but the result is pretty much the same. You will continue to get to depreciate the portion of the house attributable to home office and get the same deductions related to that percentage of the home being used for your home office...taxes, utilities, insurance, mortgage interest, repairs, etc.



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Ask Your Own Tax Question
Customer reply replied 5 years ago
Thank you! The office would not be for 100% of my business, only about 30%. Do you think it would still be tax advantageous?

You're welcome. You must use the office regularly use part of your home exclusively for conducting business. So, if you use 30% of it for business, you could take 30% of the percentage for home office. But, if you only use the office as a whole 30% of the time, you would not be able to take a home office deduction for the office because it would not be used exclusively for business.

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Customer reply replied 5 years ago
Is Mortgage Interest only deductible on Schedule C? Would it be deductible on Schedule E, and is it deductible on any other schedule?
Thank you.
No...you can deduct mortgage interest and property taxes on Schedule A if it's not rental or home office.
Richard
Richard, Tax Attorney
Category: Tax
Satisfied Customers: 56,009
Experience: 29 years of experience as a tax, real estate, and business attorney.
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