Home Office Deduction on Schedule E

[buns2]

I do not have a schedule C. I owned couple properties and self-managed the properties: collect rent, repairs, maintenance, background check etc.

My understanding is home office is put under line 19 – under “Other Expenses” for schedule E per the Curphey vs Commissioner ruling and other research (CPA).

1) Does it matter if it’s under the traditional method (home office % of house), not the simplified method ($5 x sqft). Do I need to fill out any other forms?

2) Do I put all the home office expenses cost under 1 property or split 50/50?

3) Given I declare a qualifying home office (tax home), can I still include mileage expenses to the rentals (maintenance, etc..)

[Anonymous_]

I'm going to page @AmeliesUncle for this but, first of all, note that your rental activities must rise to the level of a trade or business and that's a tough argument to make with a "couple properties".

Regardless, you definitely would not file other forms, such as Form 8829 as that form is strictly to be filed with Schedule C.

[AmeliesUncle]

As Tagteam mentioned, you would first need to confirm that the rental activity rises to the level of a "business" and that the office is used "regularly and exclusively".  Personally, I would think it would be unusual for a person with two rentals to meet those requirements.

But if you meet those requirements, in answer to your questions:

1) I think either method would be allowed.

2) Split between properties.

3) If your home is your "principal place of business", then the miles should be deductible.

[buns2]

Thank you @AmeliesUncle @Anonymous_ 

Since I am deducting the mortgage interest from my home office in Schedule, so I manually deduct the interest in Schedule A?

For example, say there is 10000 mortgage interest. 10% was for the home office, which equals 1000.

I put 1K in Schedule E, then 9K in Schedule A? Schedule A is picking up the full 10K mortgage interest based on the 1098 provided by the bank. Do I adjust it on the 1098 portion, or manually change it in schedule A? Do I need to click on something on the program? Thank you so much again.

[AmeliesUncle]

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@buns2 wrote:

I put 1K in Schedule E, then 9K in Schedule A?

Do I adjust it on the 1098 portion, or manually change it in schedule A? 

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Yes.

Either way is fine.  The 1098 is not actually sent with the tax return, so as long as Schedule A shows the correct amount, you are good.

[GV2025]

I have a residential rental home. I live in another property. Can I add home office deduction in Schedule E? If yes, where & how can I add it in Turbo Tax?

How do I know that the rental activity rises to the level of a 'business' in order to qualify for home office deduction?

[RobertB4444]

A home office can be used for a rental but only if it qualifies as an established business.  There has to be self-employment income generated in order to take advantage of a home office deduction.

That is not to say that you can't deduct office expenses for your rental business.  But in order to get that 'home office' with the $1500 safe harbor and whatnot you need to have an established business.  Then your rental is reported on schedule C and you qualify for the home office deduction but you also pay self-employment taxes on the income.

@GV2025