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Author: orinjade Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121599  
Subject: Unreimbursed expenses Date: 6/19/2008 11:41 AM
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Hi all,

My colleague works about 100 miles from his house. He has been commuting for a year or so, but has recently decided that he will rent a desk in an office near his home for sanity purposes. The company will not be reimbursing him the cost of the space he is renting. He is not required to have his own space, but the company has no objections to his working from a different location.

Given this situation, can he deduct his rent on form 2106 or 2106-EZ?

TIA
Orinjade
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Author: Wradical Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 101110 of 121599
Subject: Re: Unreimbursed expenses Date: 6/19/2008 12:14 PM
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My colleague works about 100 miles from his house. He has been commuting for a year or so, but has recently decided that he will rent a desk in an office near his home for sanity purposes. The company will not be reimbursing him the cost of the space he is renting. He is not required to have his own space, but the company has no objections to his working from a different location.

Given this situation, can he deduct his rent on form 2106 or 2106-EZ?

__________________________________________
Sure. The fact that it's not IN his home bypasses a lot of those rules.

BUT - as you know, the deduction goes on 2106, and as such, is a miscellaneous itemized deduction, which is:
1. subject to the 2%-of-AGI floor, and
2. added back for AMT purposes.

Bill

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Author: orinjade Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 101115 of 121599
Subject: Re: Unreimbursed expenses Date: 6/20/2008 8:19 AM
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THanks a lot, Bill.

Yes, he does itemise, and is not paying AMT at this point, and the amount is over 2% of AGI, so he should be set.

I just remember reading something about being "at the convenience of the employer" which I didn't think applied in this case, but I could find anything about it on the IRS pubs or the web for this situation - just about all examples focused on the in-home case.

Again, thanks! And yes, I have asked him to call an accountant to confirm for the first year this will apply (2009) - in 2008 he won't meet the 2% requirement since he is beginning this half-way through the year.

Orinjade

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Author: Wradical Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 101116 of 121599
Subject: Re: Unreimbursed expenses Date: 6/20/2008 9:53 AM
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I just remember reading something about being "at the convenience of the employer" which I didn't think applied in this case, but I could find anything about it on the IRS pubs or the web for this situation - just about all examples focused on the in-home case.
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Right. That "at the convenience of the employer" is part of the office-in-home rules. In this case, the only requirement would be the "ordinary and necessary" standard for business expenses. And with cash paid to an unrelated party, for a shared or sublet office space, to save a 100-mile one-way commute, it should certainly meet that requirement.

Bill

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