Form 8829 Asset Entry Worksheet No longer allows Option "M-Home Office" in the Type of Asset (line 5)

[sjones1370]

I am trying to finalize my taxes and the Form 8829 was working fine last night.  However, with this mornings update, the Form 8829 Asset Entry Worksheet No longer allows Option "M-Home Office" in the Type of Asset (line 5).  Thus, I am getting an error and all the other choices are not appropriate.  Please advise as to what to do or fix this bug.

[Mike9241]

you either have to wait for Turbotax to fix it or you can try using category J1. in effect M is the same as J1 because a home office is treated as nonresidential real estate.

[weaslebub]

Was this problem ever officially fixed?

I am catching up on my filings due to a long battle with health issues and have been reading about bugs people encountered following one of the updates. Some reported only seeing Asset Types of M and N, and then it seemed like the fix restored all the other Asset Types except for M and N, and the workaround was to use type J1-Nonresidential for a home office.

I'm at this point now after importing all my home office data from prior years. The import brought forward all the numbers correctly (as best I can tell), but instead of using the same Asset Type of M that's been used for the last 5-years, it defaulted to "O-Other".

Type M and N are no longer in the list of options.

Was a fix ever implemented? If so, what version would that be on? I am using 020.000.1919 and it says I'm up to date. If not, how do I work around this?

[Mike9241]

what tax year? the instructions for form 8829 say its only to be used for schedule C see below

in forms mode for schedule C for 2023 there are separate asset entry worksheets other than auto, home office (no M or N) and asset entry worksheet for home office types M and N this also requires entries for the 8829 worksheet

the proration of cost for depreciation purposes comes from the entries on the 8829 worksheet

in step mode when you come to schedule C > business expenses page the last item listed is home office expenses

if you read the 8829 instructions it says this

Use Form 8829 to figure the allowable expenses for business
use of your home on Schedule C (Form 1040) and any carryover
Who cannot use Form 8829. Do not use Form 8829 in the
following situations.
• You are claiming expenses for business use of your home as a
partner or you are claiming these expenses on Schedule F ( i would also assume schedule e rentl/royalty}
(Form 1040). Instead, complete the Worksheet To Figure the
Deduction for Business Use of Your Home in Pub. 587. (You
cannot claim expenses for business use of your home as an
employee.)

https://www.irs.gov/pub/irs-pdf/p587.pdf 

[weaslebub]

This is for tax year 2020.  Sorry, maybe you can't see the same discussion thread I was replying to, because I don't understand what you are suggesting or referring to.

Here is a summary of the problem:

Based on numerous threads I have read, it was nearing the October filing deadline in 2021 (for 2020 taxes) when desktop TT users were complaining about getting errors on the 8829 Asset Entry Worksheet for their home office.

Following a TT software update, the dropdown selection list on Line 5 (Type of asset) suddenly appeared blank and shaded red, and this caused an error that prevented the return from being filed.

Initially, the dropdown list only showed M or N as possible options, and users needing to enter a different asset type complained. They were told that a fix was being worked on, and shortly thereafter one was released.

Right after that, other users began complaining of having the opposite problem, that the dropdown list for Line 5 showed all other asset types EXCEPT for Type M or N.

This was a few days from the October deadline, but I only saw posts saying it was a bug needing to be fixed and not anything official.

This is the same problem I now have. My 2020 software version does not show Type M or N in the dropdown list for Line 5 of the 8829 Asset Entry Worksheet. I confirmed that my prior year's return did have Asset Type "M-Home Office" selected on this form, so it should have transferred correctly when I imported everything into my 2020 return. I compared all the other data on this form that was imported and everything looks to have transferred correctly, including the Asset Life History. The only thing that was wrong was that the Asset Type was automatically changed to "O-Other" because "M-Home Office" was not in the list of options.

So, back to my original question. Was a fix ever implemented and what is the latest update version made to the 2020 Home & Biz software for Windows? A few people posted on that discussion thread that a workaround to this problem would be selecting "J1-Nonresidential", but that entering the correct data would be necessary.

I don't know what data they were talking about or where I'd even begin to find it, but considering this is the result of a program bug in TurboTax, it seemed like this was a reasonable place to ask for a solution.

I don't need IRS guidelines or instructions. I don't need details about what is or isn't on this form in years other than 2020. What I do need is for the software I bought to work correctly, or I need clear instructions for a reasonable workaround that is acceptable to the IRS.

[Mike9241]

Turbotax is following IRS rules. form 8829 can only be used for HO expenses properly reported on schedule C.  The Turbotax fix was to provide for a separate asset entry worksheet for HO expenses for schedule C (see below) Turbotax will not allow form 8829 to be used for any other form nor will it calculate a HO deduction for any other form. this will require you to delete asset entry worksheet currently using type O and then renter info in the HO section for schedule C.  

for Schedule C go to the Wage & Income tab scroll down to

Business Items > Business Income & Expenses (Sch C)

click on the link to start or update

as you go through in step-by-step you'll come to a page that says "Business Expenses" at the bottom is the link to enter home office expenses. This will require reentry of the HO info from the prior year. Only the asset entry worksheet under the HO expense category allows you to select type M or N for depreciable asset assets

for any other form PUB 587 must be used to figure your deduction. enter as other expense on the appropriate form. there is no other workaround. No supporting form is required but keep the calculations and support in case you're audited. 

Note employees cannot take a HO deduction (2018-2025) for federal purposes and there are special rules if the HO expenses involve the activities of a corporation or partnership.

.

[weaslebub]

Thanks for your reply.

This is the only error I have and it's preventing me from filing our return.

I verified all my business and home office information, expenses, and assets were entered properly, but the dropdown list on Line 5 of Form 8829 Asset Entry Worksheet is still not showing the "M-Home Office" option.

I then tried adding a second home office for this business, making it so I split my work between two home offices. I entered direct and indirect office expenses everywhere I could, but I still got an error and the Line 5 dropdown list for the new office was highlighted red. Option M was not in the list for either office.

Next. I tried deleting both offices and started over. It showed no home office in the forms or on the step through screen under the Home Office summary. I added a new office, walked through everything, and entered a bunch of expenses. I ran an error check and got the same error, Line 5 was red and the dropdown list did not show option "M-Home Office".

Finally, I started a whole new return from scratch with no import, like I was a new TTax user. I entered business income and expenses, a vehicle, and a home office info and expenses. I added a few assets to depreciate, including an improvement to the home office. Same error, same result.

I checked my 2019 return, and the returns I started for 2021-2023 to see what Line 5 on the 8829 Asset Entry Worksheet showed. They all have "M-Home Office" in this option and only options M & N show in the list of options.

I don't know if you read the entries in this thread before mine, but in 2021 you replied to a user having this issue and said "you either have to wait for Turbotax to fix it or you can try using category J1. in effect M is the same as J1 because a home office is treated as nonresidential real estate."

Others replied with this suggestion as well, but I haven't seen any suggestion that something is missing.

https://ttlc.intuit.com/community/taxes/discussion/form-8829-asset-entry-worksheet-no-longer-allows-...

I'm certainly no accountant and often need to ask questions about particular situations that are new to us or haven't been an issue for a long time. But, I've been using TTax since it first came out in the 1990's and I'm very familiar with the software and the subjects I need to cover year after year. I've been doing business returns every year, and I've been reporting a home office since 2015 without any issues.

This one issue is keeping me from filing and moving on, and I don't know what else I can do to fix this.

[Mike9241]

sorry. the other day I was able to do what was posted and on the asset screen select M or N. i did not save the test return. today when I went back and tried both step mode and forms mode I could not repeat the results of the other day. NO M or N. the only thing i could suggest is use the code for nonresidential property. 

however, I left the code blank and depreciation was computed correctly. you can't efile 2020. on final review the fact there was no code for the property did not pop up as an error though in forms mode the worksheet says not done. don't know if leaving the code blank will cause and error when rolling to 2021