Completing "Tell Us About Your Home" for the Home Office Deduction

[RayeL]

My wife is a full time real estate agent. She has a small home office. For 2022 TTax it was entered using Actual Expenses. Repeating the same process for 2023. Towards the end of the interview a screen comes up asking "Tell Us About Your Home". I do not recall this screen last year. Where would the 2022 answers be found? I do not want to depreciate the home.

"Tell Us About Your Home" fields:

Describe the item asset:

Cost:

Cost of Land:

Date purchased or acquired: (mm/dd/yyyy)

Date I started using it in this business:

I verified the actual expenses are correct on the 2022 Form 8829. But all the 2022 entries on Form 8829 for "Depreciation of Your Home" are blank (no entry).

37 Enter the smaller of your home’s adjusted basis or its fair market value. See instructions . . . 37

38 Value of land included on line 37 . . . . . . . . . . . . . . . . . . . . . . 38

39 Basis of building. Subtract line 38 from line 37 . . . . . . . . . . . . . . . . . 39

40 Business basis of building. Multiply line 39 by line 7 . . . . . . . . . . . . . . . . 40

41 Depreciation percentage (see instructions) . . . . . . . . . . . . . . . . . . . 41 %

42 Depreciation allowable (see instructions). Multiply line 40 by line 41. Enter here and on line 30 above 42

Thanks for looking!

[RayeL]

Bounce

[AnnetteB6 · Accepted solution]

The questions that you see regarding your home would be used to calculate depreciation of the home office space since it is being used for business purposes.  If the information was not entered in 2022, you may have skipped it intentionally since you said you do not want to depreciate the home office.

You can enter the information in your 2023 return to depreciate the home office starting now.  You may also amend the 2022 return to add the depreciation for 2022.  

Be aware that even if you choose to not depreciate the home office space, you will be required to take that depreciation into account when you sell the home.  It does not matter that you did not actually take the deduction.  

Using the simplified method for the home office expense does not require you to use depreciation or recapture it when the property is sold.

@RayeL