Question for the Money Doctors

Question submitted on Jan 24, 2013.

Question

Hello,

I am an insurance / business consultant.

I started my businss in 3/15/12. I am structured as an LLC and S-Corp for tax purposes.

I am preparing my 2012 tax return before the corporate deadline. I operate out of my home office, if I take the home office expenses deductions do I have to depreciate my home ?

Since I operate the business from one room in my home and I take a % of the home expenses as a business deduction, do I have the option to not depreciation my home ? Would it make a difference if I sold my home for a gain 5 years later?

Please
advise

DD

Answer

You do not have to take depreciation expense but if you get audited you then can not go back and include it saying I just forget to take the deduction. Depreciation expense taken would be an add back on sale.

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