turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

SlickMic
Returning Member

Home Business Depreciation and Heirs

My wife and I both use areas of the home for our respective businesses. Because she is an artist, she uses the entire lower level of the home (1501 sq.ft.) as her studio, leaving ~3500 sq.ft. of living area. I see that I can depreciate this area of the home and net a considerable refund on my return. However, I'm reading that of we sell the home, we'll have to pay the capital gains because we depreciated the home (presumably, this depreciation would be an ongoing thing, as long as she continues to create).

 

We don't ever intend to sell the home, and in all likelihood, the adult kids will inherit the property. IF they decide to sell, will they be liable for any capital gains taxes, or are they free and clear (the estate won't surpass the $11 million limit)?

4 Replies

Home Business Depreciation and Heirs

Your kids will not be liable for capital gains on the inherited home due to depreciation of the home for your business use.

SlickMic
Returning Member

Home Business Depreciation and Heirs

Thanx DanPaul02! I thought and was hopeful that was the case!! Makes quite the difference!

Hal_Al
Level 15

Home Business Depreciation and Heirs

@SlickMic said: "she uses the entire lower level of the home (1501 sq.ft.) as her studio" ..... "I see that I can depreciate this area (3500 sq.ft. of living area) of the home and net a considerable refund on my return".

 

To claim a home office (business use of home), the space must be used "Regularly and Exclusively" for business. It's not possible to use your  whole residence Exclusively for business. 

SlickMic
Returning Member

Home Business Depreciation and Heirs

Understood! I was referring to the 1500 sq.ft. that is being used exclusively as a studio. Not the entire ~5200 sq.ft. of living area in the home.

Use your Intuit Account to sign in to TurboTax.
By selecting Sign in, you agree to our Terms and acknowledge our Privacy Statement.
message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
message box icon

Ready to start your taxes?

Hand off your taxes, get expert help, or do it yourself.

See Pricing

Related Content

Manage cookies