Are there Tax consequences for selling a home that once had home office deductions?

[joanofmagalia]

What are the Tax consequences for selling a home that once had home office deductions?

[KrisD · Accepted solution]

It depends on how you reported the home office.

If you used the "Regular Method" to report the home office, you were given a "Depreciation" deduction, and when you sell your home, you need to re-capture that deduction, or pay it back.

If you used the "Simplified Option" (which became available for tax year 2013) you took a rate ($5.00 per square foot) as a deduction, rather than depreciation, so no recapture is necessary.

You would need to see how you reported the home office deduction on your past returns.

IRS information about depreciation recapture on home office