The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies

URL:  http://boards.fool.com/sounds-good-to-me-but-be-careful-which-utilities-11086575.aspx

Subject:  Re: Telecommuting Deductions Date:  7/26/1999  12:49 PM
Author:  zorloc Number:  17668 of 121592

Sounds good to me, but be careful which utilities you deduct. A primary phone line is usually not allowed to be included.

One thing to consider is that if you deduct part of your house cost (mortgage principal), when you sell your house that percentage will be OUTSIDE you excemption. In a simple example where you sell your house after you have paid off the mortgage: say your house sells with a gain of $100,000, 6.6% is $6,600. Even though you can excempt $500,000 (for a married couple), the portion used for a home office cannot be excempted. So you would have to pay capital gains on the $6,600, which at 20% is $1,320.

Of course if your gain will be more than $536,000 then there is no down side since your 6.6% for the Home Office will be above the excemption ceiling anyway...

jbw
Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us