Background:
In April 2022, my wife and I (filing jointly) built a 200sqft shed on a concrete slab in our backyard and converted it into two separate 10x10ft offices with insulation, drywall, electricity, internet, and HVAC minisplits. This was initially done for our remote W-2 jobs, but I was laid off in Jan 2023, and have since been using my office 100% for my freelance self-employed graphic design business. My wife still uses her office for her W-2 job. I'd like to claim my office as a business asset as I have no intention of going back to a W-2 job.
Questions:
- What is the best way to categorize this asset? I've read some people claiming these backyard offices as non-residential real estate property (with the 39yr depreciation), but others are claiming it as "Intangibles, Other property".
- If I claim it as "Intangibles, Other property", how do I determine the asset class life? I reviewed Publication 946 and don't see anything that fits this use-case. The shed is supposed to last 10-15 years with good maintenance, but the concrete would obviously last longer.
- If I claim this as a business asset, can I also claim it as Home Office Deduction, or would that be considered double-dipping?
