I have a rental home that I'm using part of it as my office while the other part of the home is rented out. How is the tax deduction handled in this situatiion since it is not my primary home.
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Based on the information you have provided, the entire rental property would be reported on Schedule E of your Form 1040 if you own the property in your personal name.
You are indicating there are two renters - the residential tenant and a business tenant (your business). It is assumed that you have a rental agreement with each tenant, or should have. The income from both tenants would be taxable rental income on Schedule E and you would deduct any expenses which are not paid by the tenants on the same schedule.
Your business would pay rent to the landlord (yourself). Such rent would be reported as rental expense on Schedule C for your business, provided that the business is a Sole Proprietorship or Single Member LLC.
If the business is a partnership or S-Corp, the rent expense would be reported on Form 1065 or 1120-S, respectively.
The advantage of your business paying rent is that it increases the ROI for the rental property, thus making it more valuable in the market place once you do decide to sell it.
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