Joint & Multiple Home Office use

[FEDUKE404]

Final word

I'm pretty much through with chasing my tail here, however some parting observations:

1 - Based on the facts presented, everything I read indicates for all intents and purposes there is in reality only a single, 140 sq ft, office that is used by two people for a total of four businesses. It would make much more sense to (attempt to) allocate the overall OIH expenses between those four Schedule Cs than to try to create "multiple" (or "split") offices. (Are you going for two offices or for four offices????) Perhaps if husband was an accountant and wife was a seamstress, I could follow his/her space and his/her equipment.....but the facts just do not indicate that to be the case. Excluding the possibility of a Berlin Wall down the middle, the entire office and all depreciable equipment and all resources appear to be shared by both spouses for the four businesses.

2 - I thought a separate Form 8829 (and Form 4562) is needed to be calculated for each Schedule C because:

3 - Unless I am severely mistaken, the Form 8829 numbers are subject to limitations imposed by line 29 of each Schedule C. Depending upon whether that number is either +/- can also determine the allowable depreciation deduction (as well as any depreciation carryforward) calculated on Form 8829 (starting with lines 26 & 27) .

4 - Tracking the "unused expenses" for any Sch C losses is certainly necessary, but if you are already dealing with losses related to a specific Sch C then in theory the Form 8829 for the "loss" Sch C may be different from the Form 8829 for the "gain" Sch C merely because of the additional depreciation limitations, including Part IV of Form 8829 issues for past/future years.

Have fun! I'll continue to read this thread whenever time allows.

FE

[JohnH]

I'll throw in a parting shot as well, because I ran across it somewhere but didn't go back & study the details. What happens if the return is audtied and the auditor establishes that ONE of the businesses does not meet the test of a qualifying home office? Would that then cause the deduction to fail the "exclusive and regular" use test for all the other business activities, thus disqualifying the entire home office deduction? And if business related mileage is being deducted because of the home office deduction, would all that go out the window as well?

[Gene V]

Yes

I'll throw in a parting shot as well, because I ran across it somewhere but didn't go back & study the details. What happens if the return is audtied and the auditor establishes that ONE of the businesses does not meet the test of a qualifying home office? Would that then cause the deduction to fail the "exclusive and regular" use test for all the other business activities, thus disqualifying the entire home office deduction? And if business related mileage is being deducted because of the home office deduction, would all that go out the window as well?

John,
According to Pub. 587 page 5,

Example. Tracy White is employed as a teacher. Her
principal place of work is the school, which provides her
office space to do her school work. She also has a mail
order jewelry business. All her work in the jewelry business
done in her home office and the office is used exclusively
for that business. If she meets all the other tests, she can
deduct expenses for the business use of her home for the
jewelry business.

If Tracy also uses the office for work related to her
teaching, she must meet the exclusive use test for both
businesses to qualify for the deduction. As an employee,
Tracy must also meet the convenience-of-the-employer
test to qualify for the deduction. She does not meet this test
for her work as a teacher, so she cannot claim a deduction
for the business use of her home for either activity.