Home Office Use - but room not exclusive to use

[mario100]

I have a client who has their own business and runs it from their home, filing a Schedule C. But they do not have a room exclusive to their business, meaning, most of the year they have a bedroom which they convert to their home office, in which they meet clients occasionally, otherwise, they drive to meet clients. But as their home is not a big house, when family visits, they move their "office" to the den and use that as their office. So, the room is not exclusively for the home office deduction as stated in the IRS pub 587.

But, as their business is solely run from their home, and no where else, can they not pick up most of their mortgage and other home expenses on their Schedule C, aside from the percentage of use on the Home Office Use form? I don't see how they cannot pick up these expenses on their Schedule C, and use a % as well, but I cannot see where it states I cannot do this.

Thank you!

[TaxGuyBill]

Section 280A says no deductions are allowed, unless they meet the required rules (such a exclusive use).

(a) General Rule - Except as otherwise provided in this section, in the case of a taxpayer who is an individual or an S corporation, no deduction otherwise allowable under this chapter shall be allowed with respect to the use of a dwelling unit which is used by the taxpayer during the taxable year as a residence. ... Subsection (a) shall not apply to any item to the extent such item is allocable to a portion of the dwelling unit which is exclusively used on a regular basis.

[kathyc2]

Have them use the den all year for HO, or put guests in the den. Problem solved.

[taxea]

allocate sqft of portion used for office against sqft of entire room.

[Kram BergGold]

What I do

Most times the big reason for wanting a home office is to capture the driving deduction. In a case like yours, I claim only that space directly around their work desk as the area regularly and exclusively used for business. This 15 or 20 sq ft area might only result in a 5% home office but they get all the miles. Until your client adjusts his way of doing things, this is your only option.

[TaxGuyBill]

Most times the big reason for wanting a home office is to capture the driving deduction. In a case like yours, I claim only that space directly around their work desk as the area regularly and exclusively used for business. This 15 or 20 sq ft area might only result in a 5% home office but they get all the miles. Until your client adjusts his way of doing things, this is your only option.

I agree. MAKE a small space be exclusive.