The answers here should help you move forward to complete your sale of your home. Let's answer the questions one at a time.
- If you did use depreciation on the home office (not the simplified method) then your depreciation will be calculated as follows.
- Step 1: Total cost of home (do not include the land portion) times the percentage of business use (usually office square feet divided by total square feet).
- Step 2: Next, take that figure times the depreciation rate which should be 2.564% for every full year. Assumes the property was placed in service under the 39 year straight line mid month convention (SLMM).
- Step 3: For the first year and the last year divide that percentage by the number of months of business use in each year. Take the total times the same cost basis. Add the amount from Step 2 & 3 together. This is your total depreciation used on the home office.
- Depreciation allowed as a deduction should be counted. If there was a year you were not entitled to the deduction because your business did not have sufficient income to allow the deduction you would not count a depreciation expense for that specific year(s).
- It depends on whether you were reimbursed for a home office expense by the business. If not, that would mean zero for the years you did not use a home office or take the deduction.
- If you reported a home office deduction on Schedule C for 2022 - do not indicate it was sold in that section. You can select that it was removed from service (not sold).
To report the sale of your home use search (upper right) > type sale of home > Click the Jump to... link > begin your entry. In this area you will use the depreciation expense calculated above for the amount requested in 'after May 6, 1997'.
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