Thanks cboizauer , I actually read through this documents and it makes more sense but I think the problem lies in TurboTax. It wont let you deduct home office expenses without any income, so do you just put those expenses on a different line (e.g. startup costs)? That's the challenge I'm having. I actually agree with the offset as it's way more likely not to get flagged and cause an audit. Even if it does, it can still be explained.
