home office deduction with sale of home

[pvt]

We sold our home in December of 2020. I have taken the home office deduction since 2007. 

Questions- form 8849 shows taxable gain of $16k. My business income is $13k. For the new home, I am taking the simplified deduction, for the old home I have always done actual square footage. Am I correct in thinking:

- I can still add all indirect expenses for the old home on form 8829, for the entire year, except depreciation

- I can add one month equivalent of square footage for the simplified deduction (25 instead of 300)

- line 8 of form 8829 should contain $16k + $13k (?)

Thanks in advance!

[Cynthiad66]

No.  It is the Simplified Method or the Actual expense deduction.

Employees working from home can't take the home office deduction, even if you've been asked to work from home due to COVID-19. This has been in place since 2018, when the Tax Cuts and Jobs Act was signed into law. Prior to that, employees who worked from home at the convenience of their employer were allowed to deduct home office expenses under the 2% rule.

If you're self-employed, however, housing-related expenses such as mortgage interest, rent, utilities, repairs, and depreciation for the portion of your home or rental that you use to run your business are allowable expenses under the home office deduction.

You may be able to claim the home office deduction if your office is:

• Used regularly and exclusively for your business, and
• Is your principal place of business (both conditions must apply).

When you enter your home office information in TurboTax, we'll ask some questions to determine if you can claim the deduction and how much the deduction is worth. You’ll need information like the square footage of your residence and the rooms you worked in.

[Carl]

If the home office is not for a business that you own (typically reported on SCH C) then you have not been allowed to claim a home office since the 2018 tax year.  But lets assume you're self employed.

When you're done, you will have "TWO" home offices shown in the SCH C section. One for the hold home, and another for the new home.  Each will have their own respective "expenses".

you simply "close" the old home office, and then you open a new one. Make sure your open date of the new office, is not on or before the closing date of the old office.

[pvt]

Thank you- I am self employed and this does make sense. Can you comment on the last question- what goes on line 8 of form 8829? Does that amount include the $16k gain on the sale of the house?