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Home Office Deduction Allows for Some Personal Use

Saul Brenner, CPA, J.D., LL.M. 10.20.2014 | eVisor

The home office deduction, where a portion of a residence is used regularly as a principal place of business, can allow for some personal use according to a recent Tax Court Summary Opinion1.

The petitioner in the case lived in a 700 square foot studio apartment which she used as her place of business. She was not reimbursed by her employer for any expenses relating to the apartment.   She listed her apartment on the employer’s website as her place of business and met with clients and conducted business there. Due to the configuration of the apartment, the petitioner had to pass through the areas used for business for non-business reasons — getting to the kitchen, bathroom, and bedroom areas.  The petitioner even admitted that some areas of the office space were used for non-business purposes. However, the court held that her personal use “was de minimis and wholly attributable to the practicalities of living in a studio apartment of such modest dimensions.”

1 T.C. Summary Opinion 2014-74 Lauren Elizabeth Miller, Petitioner v. Commissioner of Internal Revenue, Respondent. Docket 11018-13S. Filed 7.28.14

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