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Author: edcosoft Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120809  
Subject: Re: Home Office deduction Date: 3/30/2005 12:50 PM
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Bob said:
Yes. When you eventually sell your home, before applying the home sale exclusion of $250,000 or $500,000 (depending on whether you're married), you will first be required to recapture all depreciation allowed or allowable. In other words, you will eventually be taxed on the depreciation whether you take the deduction or not. So you might as well take it if you're entitled to it.


I'm not an expert in this field, but seem to me that if you don't take the Home Office Deduction in any year you don't have to take depreciation so the above is not correct. The HOD is not mandatory and may be skipped voluntarily or because the space no longer (or just in that year) qualifies for the HOD.

But no, you can't pick and choose which deductions to take if you elect the HOD. I think you mnust take property taxes and mortgage interest first (because you could have deducted them on Schedule A) and depreciation last, with other expenses, such as utilties, inbetween.

Without the HOD you could still deduct your second phone line, office equipment, DSL and/or website maintenence and applicable car, travel and entertainment expenses (and the taxes and interest on Schedule A). ed
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