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I am a self-employed writer. I publish my own books and sale

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I am a self-employed writer...
I am a self-employed writer. I publish my own books and sale them as e-books online at Amazon.com and BarnesandNoble.com. Question: I purchased a second home in Sept. 2011 to use as my exclusive home office (90 to 100 percent of this home is now used as my business office). Can I claim the purchase price of this second home as an office expense? Or, if not, how can I claim the purchase of this second home that I am using as a business office to write my books, edit, research, market, etc.? Thanks.
Submitted: 5 years ago.Category: Tax
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11/1/2012
Tax Professional: Robin D., Senior Tax Advisor 4 replied 5 years ago
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15,866
Experience: 15years with H & R Block. Divisional leader, Instructor
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Robin D :

Hello and thank you for using Just Answer,
You may use the entire property only if you are using the entire property just for writing and not living in any part of the home. If this house is also used for sleeping in then that part of the house is not business related.

If you use part of your home for business, you may be able to deduct expenses for the business use of your home. These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation. The home office deduction is available for homeowners and renters, and applies to all types of homes, from apartments to mobile homes. There are two basic requirements for your home to qualify as a deduction:
1Regular and Exclusively
2Principal Place of Business
If you are wanting to claim that most of the house is used exclusively for business then that is risky.
Only the portion that is used for no other purpose but your business would qualify.
You can not just write of the purchase price butyou can use the Form 8829 to show the expenses. You can also depreciate that portion of the home that meets the requirements. In using depreciation you will be allowed a portion of the cost over a number of years.

JACUSTOMER-ibe6ytk8- :

I already know all of this. My question concerns the purchase of a second home. I wanted to know if I could use the purchase price of that home as an office expense since I purchased the home for my office expenses. I already know about principal place of business and exclusivity, etc. I just want to know if I can use my second home (I have a home that I live in) as an office expense.

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Tax Professional: Robin D., Senior Tax Advisor 4 replied 5 years ago

The CHAT mode may be keeping you from viewing the answer.

JACUSTOMER-ibe6ytk8- Last Viewed on 11/1/2012 at 9:44 AM
Here is a copy:

Robin D :

Hello and thank you for using Just Answer,
You may use the entire property only if you are using the entire property just for writing and not living in any part of the home. If this house is also used for sleeping in then that part of the house is not business related.

 

If you use part of your home for business, you may be able to deduct expenses for the business use of your home. These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation. The home office deduction is available for homeowners and renters, and applies to all types of homes, from apartments to mobile homes. There are two basic requirements for your home to qualify as a deduction:
1Regular and Exclusively
2Principal Place of Business
If you are wanting to claim that most of the house is used exclusively for business then that is risky.
Only the portion that is used for no other purpose but your business would qualify.
You can not just write of the purchase price but you can use the Form 8829 to show the expenses. You can also depreciate that portion of the home that meets the requirements. In using depreciation you will be allowed a portion of the cost over a number of years.

 

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Tax Professional: Robin D., Senior Tax Advisor 4 replied 5 years ago
Only the portion that is used for business. You can not use the purchase price except under depreciation.
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Customer reply replied 5 years ago

Where are you getting this information from? You quoted no IRS source for me to confirm. Please provide me with the necessary info from IRS that makes your assertion that I can claim the purchase price of my second home as income if I use all of my second home for business use. I'll be happy to give you a positive rating, but I need something that confirms your assertion. Thanks.

Tax Professional: Robin D., Senior Tax Advisor 4 replied 5 years ago
your assertion that I can claim the purchase price of my second home as income if I use all of my second home for business use
You could only use all of the costs if all of the property was truly used for business. That would make it not a second home but a business property. You already know that it is not because you refer to it as a "second home". The only portion you can even look at would be the room or rooms that are just used for business purposes only. The purchase price is used for depreciation but only to the percentage that is business.
You will be limited to the actual amount that you can claim based on the actual amount of Met Income after expenses, but the amount that is limited can be carried forward.
You quoted no IRS source for me to confirm
I apologize for not giving you the IRC for the law behind your situation. Most askers just want the explanation but the following IRC codes are relevant:
IRC §280A, IRC §280A(c)(1), IRC §121(d)6), §1.280A-2(i)(3), IRC §280A(c)(5)
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