Unfortunately, passive income from Schedule E does not qualify for the home office deduction, and the
IRS considers rental property income as passive. To qualify for a home
office deduction you would need to have a trade or business (Schedule C), a
farm/ranch (Schedule F), or be an employee who is required by the
employer to maintain a office in their home.
Here's a link from the IRS website with more information regarding tax deductions for your home office: http://www.irs.gov/publications/p587/index.html
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