Mileage

[geekgirldany]

I've been doing a little more reading on this.

To qualify to deduct expenses for business use of your home, you must use part of your home:

Exclusively and regularly as your principal place of business,

Exclusively and regularly as a place where you meet or deal with patients, clients, or customers in the normal course of your trade or business,

In the case of a separate structure which is not attached to your home, in connection with your trade or business,

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So I originally said a place to store tools would allow you to have the mileage deduction. I believe I am incorrect because of the above tests. Plus consider the following from Pub 587:

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Storage of inventory or product samples. If you use part of your home for storage of inventory or product samples, you can deduct expenses for the business use of your home without meeting the exclusive use test. However, you must meet all the following tests.

You sell products at wholesale or retail as your trade or business.

You keep the inventory or product samples in your home for use in your trade or business.

Your home is the only fixed location of your trade or business.

You use the storage space on a regular basis.

The space you use is a separately identifiable space suitable for storage.

Example.

Your home is the only fixed location of your business of selling mechanics' tools at retail. You regularly use half of your basement for storage of inventory and product samples. You sometimes use the area for personal purposes. The expenses for the storage space are deductible even though you do not use this part of your basement exclusively for business.

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So storing tools in the garage won't pass. You have to actually meet all the tests for the "Storage of Inventory/Product Samples". If you are not in retail then that is nixed. It says this for separate structures:
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Separate Structure

You can deduct expenses for a separate free-standing structure, such as a studio, workshop, garage, or barn, if you use it exclusively and regularly for your business. The structure does not have to be your principal place of business or a place where you meet patients, clients, or customers.


Throwing some tools in the garage does not count. A separate structure could count if there is an office in it. You need to be doing some type of administrative work or seeing clients for it to be a principal place of business. No principal place of business then no mileage deduction.

I've never had this come up when preparing a return. All my clients have an office in their home in a separate room. Some will store inventory in their garage and I don't remember ever taking a deduction for someone storing tools in their garage.

[taxea]

Let me get this straight.

If t/p has an exclusive space for storage, which will allow him to claim OIH, then the office inside the home used for business does not need to be exclusively for business for the purpose of claiming mileage? This is under the assumption that he does all administrative work at home but the space is not exclusively used for business as the storage is.

The OIH does not have to consist of a full room. A desk from which administrative work for the business is done is sufficient to call it a home office. If supplies are stored in a garage cabinet, then that area is also considered as part of the OIH. One can take mileage without having a home office. If he rents a desk in a business office away from his home the mileage to and from his home to this office is considered commute. All other mileage for business purposes is deductible. If he has office space at home then all mileage for business purposes is deductible.

Does that help?
taxea@hawaii.rr.com

[geekgirldany]

To deduct mileage you need a principal place of business.
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Your home office will qualify as your principal place of business if you meet the following requirements.

You use it exclusively and regularly for administrative or management activities of your trade or business.

You have no other fixed location where you conduct substantial administrative or management activities of your trade or business.
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Having supplies in a garage would not make that area part of the OIH. Storing inventory in it would.

[New York Enrolled Agent]

I've been doing a little more reading on this.

I believe the judge in Bogue (the TCM case cited in a prior post) agrees with your conclusions.

He writes:Petitioner also argues that his use of the storage shed exclusively for business entitles him to deduct his commuting expenses. Although deductions are allowed for separate structures used in connection with the taxpayer’s business, pursuant to section 280A(c)(1)(C), the use of such separate structures for business does not qualify the taxpayer’s residence as his principal place of business. The term “principal place of business” is set forth in section 280A(c)(1)(A) and the flush language following section 280A(c)(1)(C) that, by its terms, clarifies only section 280(c)(1)(A). Accordingly, petitioner’s exclusive use of his storage shed does not make his residence his principal place of business.

[Roberts]

To deduct mileage you need a principal place of business.
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Your home office will qualify as your principal place of business if you meet the following requirements.

You use it exclusively and regularly for administrative or management activities of your trade or business.

You have no other fixed location where you conduct substantial administrative or management activities of your trade or business.
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Having supplies in a garage would not make that area part of the OIH. Storing inventory in it would.

For the OP we are talking tools that are a requirement of the job itself.

[smithtax]

We have beat this subject to death

The IRC AND TCM has spoken very clearly, and contrary to obvious personal opinions, we must acquiesce to higher authority and apply applicable law relating to this issue.

No deduction allowed.

[taxea]

I believe the judge in Bogue (the TCM case cited in a prior post) agrees with your conclusions.

He writes:Petitioner also argues that his use of the storage shed exclusively for business entitles him to deduct his commuting expenses. Although deductions are allowed for separate structures used in connection with the taxpayer’s business, pursuant to section 280A(c)(1)(C), the use of such separate structures for business does not qualify the taxpayer’s residence as his principal place of business. The term “principal place of business” is set forth in section 280A(c)(1)(A) and the flush language following section 280A(c)(1)(C) that, by its terms, clarifies only section 280(c)(1)(A). Accordingly, petitioner’s exclusive use of his storage shed does not make his residence his principal place of business.

If all he does is store business related items on his property and does not do administrative work then the storage area is just that. I don't see a deduction without an OIH. If he stores business items in a storage facility and pays rent for the area then he can expense the rent as business related.