If the amount you reported last year on Line 37 included the value of the land, you have taken too much depreciation for this asset. In this case, you would need to amend your prior year return to reduce the property basis by the land value and lower the depreciation expense.
If the amount on Line 37 last year did NOT include the land value, then Line 38 should be zero (or blank). The total on line 39 is the property basis used for depreciation and is the total basis from Line 37 less the land value included in Line 37. The value of the land is needed only for this calculation. It does not affect any other area of your Home Office Deduction.
However, if you decide to stop using this home office and enter a new one, you may report the carryover or prior year operating expenses in the Home Office setup, which is reported on Line 31.
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