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meredith
New Member

My husband is a builder and built a model home to show customers our work, is that tax deductable? We do live there now as well.

 
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DS30
New Member

My husband is a builder and built a model home to show customers our work, is that tax deductable? We do live there now as well.

Unfortunately, if you use the home for personal use, you will not be able to take a business deduction related to this home.

However, if you use a part of your home exclusively for business, then you can take a home office deduction for that part of your home used for business.  (This may include any rooms in your home that you consider "showrooms" that are only used exclusively for business and to show potential clients design features.)

To report a home office expense related to your business in TurboTax:

https://ttlc.intuit.com/replies/4773249

Additionally, in Revenue Ruling 89-25, the IRS said that home builders may not depreciate model homes that are used temporarily for display and office space. The model homes remain primarily for sale to customers in the ordinary course of business rather than property used in a trade or business, the ruling said.

The IRS noted that Regulation 1.167(a)2 allows depreciation only of property subject to wear and tear, decay or decline from natural causes, exhaustion and obsolescence. But the regulation does not allow depreciation to inventory or stock in trade such as homes for sale, the IRS noted.

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DS30
New Member

My husband is a builder and built a model home to show customers our work, is that tax deductable? We do live there now as well.

Unfortunately, if you use the home for personal use, you will not be able to take a business deduction related to this home.

However, if you use a part of your home exclusively for business, then you can take a home office deduction for that part of your home used for business.  (This may include any rooms in your home that you consider "showrooms" that are only used exclusively for business and to show potential clients design features.)

To report a home office expense related to your business in TurboTax:

https://ttlc.intuit.com/replies/4773249

Additionally, in Revenue Ruling 89-25, the IRS said that home builders may not depreciate model homes that are used temporarily for display and office space. The model homes remain primarily for sale to customers in the ordinary course of business rather than property used in a trade or business, the ruling said.

The IRS noted that Regulation 1.167(a)2 allows depreciation only of property subject to wear and tear, decay or decline from natural causes, exhaustion and obsolescence. But the regulation does not allow depreciation to inventory or stock in trade such as homes for sale, the IRS noted.

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