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Author: RooCat Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121585  
Subject: Re: Home Office clarification Date: 12/10/1999 3:10 AM
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1. Can a W-2 employee get around deducting 2% of AGI from home business expenses? NO.

2. If you are entitled to depreciate your home, how can you not do it? How can you not depreciate the home and claim unreimbursed business expenses for work at home? The key here is that depreciation may be taken. It is an election, sort of. You can also choose not to depreciate at all.

How can you not depreciate the home and claim unreimbursed business expenses for work at home? I do not see what one has to do with the other. Depreciation is just one of many possible expenses.

3. When you sell a house, having claimed part of it as a home office and depreciated it, are you on the hook for more than the percentage of the capital gain in relation to the percentage of the house the home office represents? What you recapture is exactly what you deducted as depreciation. I disagree with Bob that it is worth while since even at the 25% recapture rate, it is more than the possible exclusion at 0% or even LTCG at 20%. And to save what percentage now?

Is that why people are avoiding this deduction? Yes. Except it has nothing to do with your appreciation. It has to do with straight recapture. I just had a doctor friend burned big time over his sale of his house in Del Mar. He was stunned by what it cost him. (No, I am not his tax accountant or I would have warned him.)
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