Home Office

[jrossley]

My wife and I are realtors. We share a home office. 75% of our business is conducted from the home office. This year, we moved part way through the year, so we have 2 home offices to deduct - again, we shared each. I am confused on the questions asked during the "interview." 

1) I lived  in other homes during the year

2) I had home office in each

3) I used the office for my business
4) I shared the office

5) Business conducted in each office - 2 months in one and 10 in the other. Do I enter 17% and 83% (2/12 and 10-12)? Or do I enter12.75% and 62.25% - (2 divided by 12 times 75% and 10 divided by 12 times 75%)?

6) Under business expenses, I have tagged each item (ie power and heat) to the appropriate office/home. All other business expenses went directly onto Schedule C. Is this proper? Why do I need to assign a percentage of expenses to each office?

Please educate me, or send me a link(s) to guide me.

Thanks

[AnnetteB6]

As you are entering information for each of your home offices, you would calculate the percentage for each using both the number of months the office was used and the percent of time you spend conducting business in the office.  So, for your example, you spend 75% of time doing business in your office and you used the first office for 2 months, so your percent for the first office would be (0.75 x (2/12)) or 12.5%.  

It is appropriate that business expenses not related to the home office are entered directly on the Schedule C.  Those expenses are then prorated according to which office was being used when they were incurred so that the home office deduction limitation (if any) can be calculated.  

The following TurboTax help article will better explain how to allocate and enter information for two home offices used during the year:

How do I allocate expenses for two home offices?