I think that I have worked through the “IRS speak” in the instructions for schedule C but I would like some confirmation that I have got it right. Using the simplified method, $ 5 per square foot, to calculate the part of the home that is used for business I come up with $ 500. Line 29 is the tentative profit or loss after deducting all other expenses.
The examples below come to mind as how to treat possible outcomes.
A) If the tentative amount is a PROFIT of $ 1200 then ALL $ 500 can be used as the home office expense.
B) If the tentative amount is a PROFIT of $ 300 then ONLY $ 300 can be used as the home office expense.
C) The tentative amount is a LOSS of $ 150, ( or actually any loss ? ), then NONE of the $ 500 can be used as the home office expense.
Have I got all these thought out correctly?
Have I missed any other possible outcomes or considerations?
And, for examples B and C: if I do not use either forms 8949 or 4797, not sure when or how to use them, then any unused part of the expense cannot be carried over to next year.
I assume that TurboTax can handle all this correctly.
Thanks a lot.
