business use of home -- can I deduct cost of fence replacement? How?

[waveromper]

Hello ... help please! 🙃 We use our home for 3 small businesses (each with their own Form 8829).  In 2021 we replaced the wood fence, painted all of it, and bought tools to use in the project such as a paint sprayer and other things. We don't use our yard in any of those businesses, but since it's a home improvement can we deduct any of these expenses? If so, how? If 8829, what line? ... Other Expenses, Indirect? 

P.S. -- all 3 businesses have different percentages of business use since they're different-sized rooms.

I would appreciate some expert advice. Thank you!  🙂

[AliciaP1 · Accepted solution]

No, you cannot deduct the costs of replacing the fence because it is not used as part of the business.

Per IRS Publication 587:

@waveromper

[waveromper]

THANK YOU! I really appreciate the reply and how quick it was.

Just a follow-up question about the tools: since the paint sprayer, battery for the power drill, etc will be used in other projects, are we able to take some sort of partial deduction or does this disqualify those items? Hard to estimate what percentage we would be using those for business in the future ...

[ColeenD3]

No, this is not a business expense. You are deducting for business use of home, and this is not a home office expense.

[joshamdo]

question piggy-backing off the original..

if a new fence is built to enclose a backyard with a detached garage used as my office space, would it then be tax deductible? @AliciaP1 

[ShirlynW]

No. The new fence is not part of the business. Also, it is not part of the home office. To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and appropriate for your trade or business. 

For more information

[Mike9241]

however, the cost of the fence will add to the tax basis of your home. it might be useful when you sell and the gain would be in excess of your exclusion.