If the basement was included with the square footage of the house when you bought the house, then it is to be included. It is also to be included if after buying the house you finished the basement with proper permits, meaning you put down flooring such as carpet or wood floors, added heat and air conditioning, finished the walls, installed lighting, and maybe even sectioned it off into a couple of bedrooms and added a bath, giving each bedroom their own closet. I.e. if it is a real home, it is to be included with the home's square footage, otherwise not. Also if you are storing inventory in part of the basement, then you can count that portion of the basement's square footage in with the home office, but then that has to be offset by counting in the rest of the basement in the homes square footage, even if it is unfinished--furthermore the inventory has to be kept together in a defined area.