Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
My husband works from home and owns a software company. He travels to meet clients so there are never clients coming to the house. In recent years our house was too small for his business so he started renting an apartment to work out of. It was half the price of renting an office in town. And we got to write the entire year's rent off our taxes.
Rather than renting, we are thinking of buying a small house (in the future) for him to use as his home office. The house would be his office for now and serve as an investment property in the future. Does anyone know how this would work for tax purposes? Would we be able to deduct the mortgage from our yearly income the way we deduct the rent payment now?
Rather than renting, we are thinking of buying a small house (in the future) for him to use as his home office. The house would be his office for now and serve as an investment property in the future. Does anyone know how this would work for tax purposes?
A CPA would know. I suggest that you consult one when you buy the house and let him set up your record keeping with instructions on what and how to deduct.
Quote:
Originally Posted by TheLonelyGoatherd
Would we be able to deduct the mortgage from our yearly income the way we deduct the rent payment now?
Not the mortgage, but you would deduct the mortgage interest and property taxes along with utilities and repairs, etc, on the Schedule C.
The price of the property (building portion, not land) would be depreciated. You'd have a choice of several methods.
The IRS has many guides that will teach you all about this.
Start with this one and there will be other sources mentioned.
Yes we will definitely be sure that it will be okay. I think the rules are only for having customers come to the house though. My husband just works by himself all day. He meets clients on site. Nobody would be coming to the house.
Rather than renting, we are thinking of buying a small house for him to use as his home office.
The house would be his office for now and serve as an investment property in the future.
Buy a bigger house; ideally a multi.
Rent out what he doesn't require for his business needs.
Quote:
Does anyone know how this would work for tax purposes?
Would we be able to ...?
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,722 posts, read 58,054,000 times
Reputation: 46185
Multi tenant preferred (for many reasons, but best for risk mitigation
Own the property in a separate LLC.
Lease it to your business.
When you sell the business, retain the property and rent it to the new business.
(A 96 yo friend still gets $8000/ month rent from a building where he sold his business in 1963.) the building is 2300 miles away, and rents NNN. (No effort required). He hasn’t even seen the building in the last 15 yrs... just ‘collect-the-money’ from Tahiti, or Tokyo.
Why don't you rent co-working space. It may cost you 75-200$ per month. Work from home and use office space, address and meet your client at the workspace. the workspace will provide you conference room too.
Why don't you rent co-working space. It may cost you 75-200$ per month. Work from home and use office space, address and meet your client at the workspace. the workspace will provide you conference room too.
A pretty good idea if one could be found.
Buying a house just for one person to use as an office seems like a tremendous waste of money.
Yes we will definitely be sure that it will be okay. I think the rules are only for having customers come to the house though. My husband just works by himself all day. He meets clients on site. Nobody would be coming to the house.
What kind of business does your husband operate?
Can you add a room to your house?
Build a separate office on your property?
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
