How do I enter depreciation for an improvement to my home office house that exceeds $2500 so cannot be deducted as an expense?

[april-dunleavy]

I have a qualifying home office. In 2016 we added a new roof and siding to the building, the cost of which exceeded $10,000. I have gone through the Home Office Expenses interview and have determined it is an improvement and not a repair. I cannot expense the cost because it exceeds both the de minimus small business harbor limit of $2500 and the 2% unadjustable basis/$10,000 requirements. Now I can't figure out how to add the amount of the improvement to the Form 8829 Asset Entry Worksheet or Schedule C. Please help.

Thank you.

[ChristinaS · Accepted solution]

You can add the improvement as a depreciable asset within the Home Office section.

If your home depreciation has already carried over from prior years, you may not have visited this section.

1. Go to Business tab, and drill in until you get to the "Your _ Business" overview page
2. click Update next to Home Office Expenses under Business Expenses
3. edit the Home office summary (presumably you went through this area before, so would see a summary first)
4. continue through all the questions until you can choose "I'll enter actual expenses with the Office Expense Expert (recommended)"
5. continue through all the screens again until you hit the Home Office Asset Summary
6. Make sure you see the depreciation for your house carryover from your prior entries
7. Now enter a Add a new asset here- to add just the improvement.

An improvement to your home is one of the asset options here. You should enter the description as something helpful, but brief. Make sure you check the box to indicate that it "an improvement to the entire home."

Following the screens above adds the improvement to your depreciation deduction on Form 8829 (Schedule C).

[ChristinaS · Accepted solution]

If you were seeing the de minimis questions, you were likely in the Business Assets section of Schedule C, not the Home Office Assets. You would not be eligible to apply the safe harbor to your home office/ improvement regardless of the amount.