I have a home office for my photo business. I don't use it exclusively for my business but I use it to store inventory. Why don't I qualify for the HO deduction?

The home office deduction requires that a space in your home be used regularly and exclusively for your business.  The home office must also be your principal place of business.  A storage area alone cannot qualify as your principal place of business.  Therefore, without another place in your home being used regularly and exclusively, you do not qualify for the home office deduction.

 

The exception for the storage area is only with regard to the exclusive use qualification.  This means that the space that you use for storage for your business does not have to be exclusively dedicated only to your business if other items are occasionally stored there.  

 

See the following TurboTax article for more information:

 

The Home Office Deduction

 

 

@27bayberry

 

 

I do use my home office regularly (but mot exclusively) for my business. It is also my principal place of business. So I meet the criteria other than the fact I don’t use the space exclusively for the business. But since   I store my inventory there I am exempt from the exclusive use portion of the rule- correct?  Am I misunderstanding  something?

Since the office is also your principal place of business, then the exclusivity exception may be met due to using the space for storage.  However, these additional requirements must also be met when you use part of your home to store inventory or product samples.  All of the following must be true:

 

 - you keep the inventory or product samples for use in your trade or business
 - your business is the wholesale or retail selling of products
 - your home is the only fixed location of your business
 - you use the storage space on a regular basis, and the space is an identifiable one and suitable for storage

 

If all of the requirements are not met, then the exception to the exclusivity test does not apply.

 

 

@27bayberry