More than 1 person using office in home

[ruthc]

I've looked over many of the forum discussions and haven't seen any that fit my question.

I have a client that wants to write off an office in their home. She uses it for selling Avon so she keeps her inventory (a lot!) in the office and she does the bookkeeping there along with phone calls. Now her husband started an ad taking job where he uses the computer for most work, bookkeeping, calling, and keeping his client's ads, etc in the same office as the wife. So they both use the same office (2 desks, etc). I'm not sure how to handle this situation. Can they both take some of an office in the home deducton if they use the same office? I know they wouldn't be able to use 100% of the expenses for each office deduction. But can I prorate for the expenses for each person? I am just not sure and want to handle it properly. I've looked online, including the IRS without any definite answer or clue how to handle.

I know this forum usually leads us in the right direction on how to handle. Thanks in advance......

[AJsTax]

How about

This to try? Say room is 300 sq Ft total. She has desk and inventory so she uses 200 sq ft. He only has desk so he uses 100 sq ft. They both list the total cost of the home on their form, but each get the % of the costs by the % of the home they actually use. So if they example is a 1200 sq ft home she would have 25% on her's and he would have 12% on his. The balance of the mortgage interest and real estate taxes flow over to their joint Sch A.
Just thought of a problem. You would to run a test to see, but that may end up with double the carryover on the A..So you would have to split the costs of the house in half first, put that on each form and then the balance would carry to the A.

[Uncle Sam]

More than 1 person using office in home

It was not stated the official status of husband - employee of outside business or self-employed person.
If employee - then he uses Form 2106.
If self employed - then he uses Schedule C with allocated portion of Form 8829.

I have a similar but not same situation.

I have a married joint return. Both spouses work out of 1 room in their condo. Each of them is self-employed on their own - 2 separate schedule C's - there's no partnership.
I have set up 2 separate Form 8829 forms where each claim 50% of the cost of that 1 room. The overflow of real estate tax and mortgage interest
goes to the Schedule A.

Now this year there's the flat standard deduction for OIH. From what I've been informed by reliable tax sources - they each split 50% of the standard
deduction - they don't each get their own maximum standard deduction.

[ATSMAN]

I have a similar situation for a couple both of them are self employed (Beautician and House inspector). However they use separately designated areas of the house for OIH. Basement for the beautician and a spare room for the house inspector. Two separate 8829 on 2 schedule C. I have an excel spreadsheet that I run just to make sure the totals don't exceed 100%.

So in this case if they are sharing one room, you will need to designate the area that is used regularly and exclusively by each business. Then do the ratios as suggested.

[ruthc]

Thank you!!!

Thank you a lot!!! I think splitting either the footage or using 50% of the room will work great. Those answers are exactly what I was having trouble with (now that I read them it is really simple). Thanks again! Thanks a bunch for this forum!!

[Uncle Sam]

Correction on earlier Post

According to the reading of the Rev. Proc. 2013-13 - EACH SPOUSE may use the safe harbor method provided they comply with all other provisions.
(Rev. Proc. 2013-13 - P. 9 - Section 4 - Application - .08-Limiations(5).

[taxea]

1 office/2 Sch C. Calculate sqft of home/sqft of total office. Calculate either sqft of office space/sqft used by each Sch C in space if two desks/computers or by how many hours each works in the office if only one desk.

[mastertaxguy]

Safe Harbor: Regular and Exclusive use?

The scenario seems to indicate that neither spouse is regularly, or exclusively, using the same space for their respective businesss.

[jsamans]

The scenario seems to indicate that neither spouse is regularly, or exclusively, using the same space for their respective businesss.

"The fact that more than one business is using the home office does not disqualify the home office under the exclusive use test for another trade or business. In multiple business use situations, the exclusive use test is applied by combining all trades or businesses using the same home office. The exclusive use test fails if one of the business activities using the home office fails under one of the other tests." (TTB 5-15)

As I read that, there's no requirement that each trade or business that uses the office in question needs to belong to the same person, merely that the space must be entirely used for business. That each spouse is using the room exclusively for business, and doing so on a regular but non-overlapping basis, should not be a problem. (The inventory, of course, is attributable purely to the wife's business, because the use of that space need not be exclusive.)