You can add a business asset and depreciate it, but home office expenses include depreciation on the home only.
For example, you can buy a desk for the home office and enter it as a business asset and depreciate it over 7 years.
Purchasing a water heater for the home is not the same. It becomes part of the house and you can claim an expense for the hot water you use for the office.
You can ADD a second water heater and claim that as a business asset if it's only used for the office.
You can even add the water heater as if it was an improvement to the house and depreciate it over 27.5 years, which it seems was what you did, but I would argue against it unless the house did not have a water heater before you added this one.
Also, be aware that when you sell, all the depreciation you take for the home office will need to be recaptured unless you sell at a loss, which is uncommon. Depreciation Recapture is taxed as Ordinary Income at your tax rate.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
