### Specific Instructions

#### Lines 1 and 2

To determine the area on lines 1 and 2, you can use square feet or any other reasonable method if it accurately figures your business percentage on line 7.

Do not include on line 1 the area of your home you used to figure any expenses allocable to inventory costs. The business percentage of these expenses should have been taken into account in Schedule C, Part III.

#### Special Computation for Certain Daycare Facilities

If the part of your home used as a daycare facility includes areas used exclusively for business as well as other areas used only partly for business, you cannot figure your business percentage using Part I. Instead, follow these three steps:

1. Figure the business percentage of the part of your home used exclusively for business by dividing the area used exclusively for business by the total area of the home.

2. Figure the business percentage of the part of your home used only partly for business by following the same method used in Part I of the form, but enter on line 1 of your computation only the area of the home used partly for business.

3. Add the business percentages you figured in the first two steps and enter the result on line 7. Attach a statement with your computation and enter “See attached computation” directly above the percentage you entered on line 7.

#### Line 4

Enter the total number of hours the facility was used for daycare during the year.

Example.

Your home is used Monday through Friday for 12 hours per day for 250 days during the year. It is also used on 50 Saturdays for 8 hours per day. Enter 3,400 hours on line 4 (3,000 hours for weekdays plus 400 hours for Saturdays).

#### Line 5

If you started or stopped using your home for daycare in 2015, you must prorate the number of hours based on the number of days the home was available for daycare. Cross out the preprinted entry on line 5. Multiply 24 hours by the number of days available and enter the result.

#### Line 8

If all the gross income from your trade or business is from the business use of your home, enter on line 8 the amount from Schedule(s) C, line 29, plus any gain derived from the business use of your home and shown on Form 8949 (and included on Schedule D (Form 1040)) or Form 4797, minus any loss shown on Form 8949 (and included in Schedule D) or Form 4797 that is allocable to the trade or business in which you use your home but is not allocable to the use of the home. If you file more than one Form 8829, include only the income earned and the deductions attributable to that income during the period you owned the home for which Part I was completed.

#### Columns (a) and (b)

Enter as direct or indirect expenses only expenses for the business use of your home (that is, expenses allowable only because your home is used for business). If you did not operate a business for the entire year, you can deduct only the expenses paid or incurred for the portion of the year you used your home for business. Other expenses not allocable to the business use of your home, such as salaries, supplies, and advertising, are deductible elsewhere on Schedule C and should not be entered on Form 8829.

Direct expenses benefit only the business part of your home. They include painting or repairs made to the specific area or rooms used for business. Enter 100% of your direct expenses on the appropriate line in column (a).

Indirect expenses are for keeping up and running your entire home. They benefit both the business and personal parts of your home. Generally, enter 100% of your indirect expenses on the appropriate line in column (b).

### Exception.

If the business percentage of an indirect expense is different from the percentage on line 7, enter only the business part of the expense on the appropriate line in column (a), and leave that line in column (b) blank. For example, your electric bill is \$800 for lighting, cooking, laundry, and television. If you reasonably estimate \$300 of your electric bill is for lighting and you use 10% of your home for business, enter \$30 on line 20 in column (a). Do not make an entry on line 20 in column (b) for any part of your electric bill.

#### Lines 9, 10, and 11

Enter only the amounts that would be deductible whether or not you used your home for business (that is, amounts allowable as itemized deductions on Schedule A (Form 1040)).

Treat casualty losses as personal expenses for this step. Figure the amount to enter on line 9 by completing Form 4684, Section A. If you are filing Schedule A, enter 10% of your adjusted gross income excluding the gross income from business use of your home and the deductions attributable to that income when figuring the amount to enter on Form 4684, line 17. Include on Form 8829, line 9, the amount from Form 4684, line 18. See the instructions for line 28, later, to deduct part of the casualty losses not allowed because of the limits on Form 4684. Do not file or use this Form 4684 to figure the amount of casualty losses to deduct on Schedule A. Instead, complete a separate Form 4684 to deduct the personal portion of your casualty losses.

On line 10, include only the total of your mortgage interest and qualified mortgage insurance premiums that would be deductible on Schedule A and that qualifies as a direct or indirect expense. Mortgage interest on a separate structure you used in connection with your trade or business is a direct expense. Do not include mortgage interest on a loan that did not benefit your home (for example, a home equity loan used to pay off credit card bills, to buy a car, or to pay tuition costs).

Treat qualified mortgage insurance premiums as personal expenses for this step. Figure the amount to enter on line 10 by completing Schedule A, line 13, in accordance with the Instructions for Schedule A (Form 1040). However, when figuring your adjusted gross income (Form 1040, line 38) for this purpose, exclude the gross income from business use of your home and the deductions attributable to that income. Include on Form 8829, line 10, the amount from Schedule A, line 13. See the instructions for line 16, later, to deduct part of the qualified mortgage insurance premiums not allowed because of the adjusted gross income limit. Do not file or use that Schedule A to figure the amount to deduct on line 13 of that schedule. Instead, complete a separate Schedule A to deduct the personal portion of your qualified mortgage insurance premiums.

If you itemize your deductions, be sure to claim only the personal portion of your deductible mortgage interest, qualified mortgage insurance premiums, and real estate taxes on Schedule A. For example, if your business percentage on line 7 is 30%, you can claim 70% of your deductible mortgage interest, qualified mortgage insurance premiums, and real estate taxes on Schedule A.

#### Line 16

If the amount of home mortgage interest or qualified mortgage insurance premiums you deduct on Schedule A is limited, enter the part of the excess that qualifies as a direct or indirect expense. Do not include mortgage interest on a loan that did not benefit your home (explained earlier).

Example.

If your business percentage on line 7 is 10% (0.10) and you paid \$15,000 of home mortgage interest but can only deduct \$12,000 on Schedule A because of a limitation, enter \$300 (\$15,000 - \$12,000 = \$3,000 x 0.10 = \$300). For more information about home mortgage interest deduction limitations, see Pub. 936.

#### Line 18

If you rent rather than own your home, include the rent you paid on line 18, column (b).

If your housing is provided free of charge and the value of the housing is tax exempt, you cannot deduct the rental value of any portion of the housing.

#### Line 21

Include on this line any 2015 operating expenses not included on lines 9 through 20.

#### Line 24

Enter any amount from your 2014 Form 8829, line 42.

If you used the simplified method for 2014 but are not using it for 2015, enter the amount from line 6a of your 2014 Simplified Method Worksheet (or line 42 of your 2013 Form 8829).

#### Line 28

Multiply your casualty losses in excess of the amount on line 9 by the business percentage of those losses and enter the result.

#### Line 30

Enter any amount from your 2014 Form 8829, line 43.

If you used the simplified method for 2014 but are not using it for 2015, enter the amount from line 6b of your 2014 Simplified Method Worksheet (or line 43 of your 2013 Form 8829).

#### Line 34

Enter this amount on Form 4684, line 27, and enter "See Form 8829" above line 27.

#### Line 35

If your home was used in more than one business, allocate the amount shown on line 35 to each business using any method that is reasonable under the circumstances. For each business, enter on Schedule C, line 30, only the amount allocated to that business.

#### Lines 36 Through 38

Enter on line 36 the cost or other basis of your home (including land), or, if less, the fair market value of your home on the date you first used the home for business. Do not adjust this amount for depreciation claimed or changes in fair market value after the year you first used your home for business.

Enter on line 37 the cost or other basis of the land on which your home sits, or, if less, the fair market value of the land on the date you first used the home for business. Do not adjust this amount for changes in fair market value after the year you first used your home for business.

Attach your own statement showing the cost or other basis of additions and improvements, used at least partially for business, that were placed in service after you began to use your home for business. Do not include any amounts on lines 36 through 39 for these expenditures. Instead, see the instructions for line 41.

#### Line 40

IF you first used your home for business in the following month in 2015... THEN enter the following percentage on line 40*...
January 2.461%
February 2.247%
March 2.033%
April 1.819%
May 1.605%
June 1.391%
July 1.177%
August 0.963%
September 0.749%
October 0.535%
November 0.321%
December 0.107%
*Exception. If the business part of your home is Indian reservation property that meets the requirements of section 168(j), see Pub. 946 to figure the depreciation.
IF you first used your home for business... THEN the percentage to enter on line 40 is...
after May 12, 1993, and before 2015 (except as noted below), 2.564%.*
after May 12, 1993, and before 1994, and you either started construction or had a binding contract to buy or build that home before May 13, 1993, the percentage given in
Pub. 946.
after May 12, 1993, and you stopped using your home for business before the end of the year, the percentage given in
Pub. 946 as adjusted by the instructions under Sale or Other Disposition Before the Recovery Period Ends in that publication.
after 1986 and before May 13, 1993, the percentage given in
Pub. 946.
before 1987, the percentage given in
Pub. 534, Depreciating Property Placed in Service Before 1987.
*Exception. If the business part of your home was Indian reservation property that met the requirements of section 168(j) when placed in service, see Pub. 946 to figure the depreciation.
Simplified method used for 2014.   If you used the simplified method for 2014, use the preceding table to find the percentage to enter.

Example.

You first used your home for business for 2014 and used the simplified method for that year. For 2015, you want to use Form 8829 instead. Enter 2.564%.

#### Line 41

If no additions and improvements were placed in service after you began using your home for business, multiply line 39 by the percentage on line 40. Enter the result on lines 41 and 29.

Attach a statement showing your computation and include the amount you figured in the total for line 41. Enter “See attached” below the entry space.

Complete and attach Form 4562, Depreciation and Amortization, only if:

• You are depreciating additions and improvements placed in service in 2015.

If you first used your home for business in 2015, enter the amounts from Form 8829, lines 39 and 41, in columns (c) and (g) of line 19i, Form 4562. In column (b) of line 19i, enter the month and year you first used your home for business. Do not include the amount from Form 8829, line 41, on Schedule C, line 13.

If you are depreciating additions and improvements placed in service in 2015, enter in column (b) of line 19i on Form 4562 the month and year the additions or improvements were placed in service. Enter the business basis of the additions or improvements in column (c) and the depreciation allowable on the additions or improvements in column (g). Do not include the amount entered in column (g) on Schedule C, line 13.

#### Part IV

If your expenses are greater than the current year's limit, you can carry over the excess to 2016. The carryover will be subject to the deduction limit for that year, whether or not you live in the same home during that year.

#### Line 42

Figure the amount of operating expenses you can carry over to 2016 by subtracting line 26 from line 25. If the result is zero or less, you have no amount to carry over.

#### Line 43

Figure the amount of excess casualty losses and depreciation you can carry over to 2016 by subtracting line 32 from line 31. If the result is zero or less, you have no amount to carry over.

For Paperwork Reduction Act Notice, see Instructions for Form 1040.