Deductions & credits
First the home office depreciation deduction you would have used would have been a 39 year recovery (not 27.5 year which is reserved for residential rental property only). The home office is considered a 'nonresidential' property for the office itself. For each year you did use the home office expense in your business you can easily calculate the depreciation that you would have used on your tax return.
- 20% of the cost of the home as listed on your 8829 x the percentage for each year you did take a depreciation deduction on your Schedule C from the MACRS chart for nonresidential property (included below). You can add the percentage from the chart for each year then take that total times the cost. There should not be any portion of the land as part of the home office cost basis.
Once you arrive at the depreciation you actually used on your prior tax returns you can enter that figure when asked in the Sale of Home. If you have a higher figure from your actual returns than you calculate from the chart, you must use the higher number.
