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Home Office – Sale Of Residence

Home OfficeQ. We bought our house for $378,000 five years ago. I installed an office in the basement for my business at a cost of about $25,000. I claimed home office deductions the last four years. Now we’re selling the house for $391,000. Since I’m selling at a $12,000 loss, do I have to recapture the home office deductions? F.H., e-mail.

A. No. In fact, you can deduct the loss on the office part of your property. But first, make sure you have a loss. Remember, you must reduce your home’s basis by gains deferred under the old gain rollover rules.

So you may actually have a taxable gain. If so, the home sale exclusion isn’t available to the extent that you claimed depreciation deductions for a home office after May 6,1997. Plus, you may owe tax on the rest of the gain from the office part of your home.


If you have any questions or require further info please call 718-531-1105 or send an email.


This web site and these articles are not tax or legal advice and are not intended as tax or legal advice.  They are intended to provide only general, non-specific legal information and are not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This web site and these articles are based on United States law.  You should consult with an accountant or lawyer familiar with the issues. This web site and the articles contained on this web site are not solicitations.

Contact Info:

Ronald Semaria
Semaria Consulting
1408 East 66th St
Brooklyn, NY 11234
Email: info@semaria.com

Phone Numbers:

Phone: 718-531-1105
Toll-Free: 866-531-1105
Toll-Free: 888-IRSAUDIT
Toll-Free: 888-RONTAXES
Fax: 718-444-7152

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