Depreciation & Recapture
Question: I have a home office. Can I deduct expenses like mortgage, utilities, etc., but not deduct depreciation so that when I sell this house, the basis won't be affected?
If you qualify, for the part of your home that is a home office:
- You can claim depreciation up to the gross income limitation.
- The home office portion is depreciated over a recovery period of 39 years using the straight line method of depreciation and a mid-month convention.
If you do not claim depreciation on that part of your home that is a home office, you are still required to reduce the basis of your home for the allowable depreciation of that part of your home that is a home office when reporting the sale of your home.
- Publication 946 (PDF), How to Depreciate Property
- Publication 587, Business Use of Your Home
- Publication 544, Sales and Other Dispositions of Assets
Category: Sale or Trade of Business, Depreciation, Rentals
Subcategory: Depreciation & Recapture