We bought a new residence in 2021 which includes a barn and acreage for our 3 horses. I have a horse business. In claiming the home office/separate structure for this business I put 100% of the structure is for work (storage of supplies and hay as well). When I input property tax to the expenses, the calculation took 100% of that and then my property tax deduction under personal deductions was totally skewed so I removed it from this business (we have 2 other home based businesses as well). The value of the barn is about $125K and I'm flummoxed by how to make this initial home office set up work!
Enter the figures manually. Calculate the business square footage as opposed to the total square footage. Prorate expenses according to that percentage.
Do you mean add the barn square footage to the house square footage and then do a percentage of the property tax based on the percentage of the barn to total?
Thank you for your reply!
Yes. I am assuming you have one property tax amount that covers both properties. You may have the same situation with a mortgage. Since the rest of the expenses will probably be 100%, this will be the only thing you have to prorate.
Thank you! I also have utilities (prorated number as well?) There is so little guidance about separate structure home offices on IRS site.
I appreciate the help!!!