If my wife takes a sofa from home and starts using it in her counseling office (not at home), can we deduct the value of the sofa as an expense to her business?

[Anonymous_]

You will either be able to expense or capitalize (write off through depreciation deductions) the sofa.

However, you will have to use the lesser of your adjusted basis in the sofa (generally what you paid for it) and its fair market value on the date of conversion to business use.

For example, if you paid $800 for the sofa 5 years ago, it might only be worth $100 today and, thus, you would use $100 as the value when you convert it to business use.

[Anonymous]

yes.  but the value is the lower of Fair market value or its adjusted basis (original cost less any amount previously deducted) on the date converted. 

the next question is what is that amount.    technically it should be depreciated over 7  years.   since it was a personal asset converted to business use it does not qualify for section 179 (expensing) or 168(k) bonus depreciation.

However, if the amount is relative insignificant, i would probably expense it as an office expense.    no guarantee that if audited the agent would see it that way.   but having handled IRS audits in the past, most  generally don't make small adjustments to tax returns because of all the paperwork and costs involved