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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121107  
Subject: Re: home office deduction for rental home Date: 1/22/2000 3:39 PM
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<<I have a question that I've asked several people, somewhat in the know about taxes, but remain uncomfortable with their answers.>>

Uncomfortable why? Because the answers don't make sense? Or because you don't like the answers you were given?

<< I rent my home, and have lived here for 6 years.>>

Ok...

<<Just this past spring I started my own business out of the house. The square footage of my office space is roughly 25% of the square footage of the house.>>

Fine...no problem so far. I ASSUME that you are qualified to claim the "office in home" deduction...since it looks like this is where you're going. If you need more information on the office in home deduction, check the Taxes FAQ area.

<< My landlord, bless his heart, decided that he would charge me two separate rents for the property, one officially business rent, and one personal rent.>>

Immaterial. If you qualify for the office in home deduction, you'll treat the TOTAL that you are being charged as the rent for the entire property. There would have to be a compelling reason why the landlord would do this (like for a completely separate structure). So simply splitting the rent has no bearing on the issues at hand.

<< He split the rent right down the middle, charging me half for each. My problem is, since the office only occupies about one quarter of the house, yet the "official business rent" is actually half my total rent, which one would the IRS>>

Add them both together, and then take the office in home deduction (assuming that you're qualified for the deduction) using the appropriate allocations. That'll solve your problem.

TMF Taxes
Roy
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