INSIGHTS & IDEAS

Simplifies Home Office Deduction

The deduction for business of a personal residence may be computed at the rate of $5 per ft sq up to a maximum of $1,500 in lieu of itemizing specific expenses. By using the simplified method, depreciation is not subtracted from the tax basis of the house and real estate taxes and mortgage deducted as itemized deductions on schedule A are not reduced by the business portion.

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