info
Google Groups no longer supports new Usenet posts or subscriptions. Historical content remains viewable.
Dismiss
Business use % when renting a room in a house
54 views
Skip to first unread message
Lee Choquette
Apr 10, 2015, 11:10:03 AM4/10/15
to
Taxpayer rents a room in a house that is occupied by others in the other
rooms. Taxpayer uses this room for personal use, and also to store the
products he sells in his business. He has no other business location.
Iiuc he can deduct the cost of this room even though it's not
exclusively used for business, as it's used for inventory storage.
What would be considered the "total area of home"? If it's just the room
he's renting, then that would mean his rent is 100% deductible (he still
shows a profit even so). Or is the "total area of home" the area of the
entire house, even though it is not his to use, personal or business?
Regardless of whether he uses the regular or simplified method, he still
has to report the total area of his "home", even though it does not
enter into the calculation of his deduction when using the simplified
method. However, his deduction is greater under the regular method.
Thanks,
Lee
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>
rooms. Taxpayer uses this room for personal use, and also to store the
products he sells in his business. He has no other business location.
Iiuc he can deduct the cost of this room even though it's not
exclusively used for business, as it's used for inventory storage.
What would be considered the "total area of home"? If it's just the room
he's renting, then that would mean his rent is 100% deductible (he still
shows a profit even so). Or is the "total area of home" the area of the
entire house, even though it is not his to use, personal or business?
Regardless of whether he uses the regular or simplified method, he still
has to report the total area of his "home", even though it does not
enter into the calculation of his deduction when using the simplified
method. However, his deduction is greater under the regular method.
Thanks,
Lee
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>
Stuart A. Bronstein
Apr 10, 2015, 12:50:03 PM4/10/15
to
Lee Choquette <le...@xmission.com> wrote:
> Taxpayer rents a room in a house that is occupied by others in
> the other rooms. Taxpayer uses this room for personal use, and
> also to store the products he sells in his business. He has no
> other business location. Iiuc he can deduct the cost of this
> room even though it's not exclusively used for business, as it's
> used for inventory storage.
No, he can deduct the proportion of his room used on a regular
> Taxpayer rents a room in a house that is occupied by others in
> the other rooms. Taxpayer uses this room for personal use, and
> also to store the products he sells in his business. He has no
> other business location. Iiuc he can deduct the cost of this
> room even though it's not exclusively used for business, as it's
> used for inventory storage.
basis for storage of inventory.
> What would be considered the "total area of home"? If it's just
> the room he's renting, then that would mean his rent is 100%
> deductible (he still shows a profit even so). Or is the "total
> area of home" the area of the entire house, even though it is
> not his to use, personal or business?
though there may be one. One approach would be (assuming that all
the rented rooms are about the same size) to divide the entire
square footage of the house by the number of renters sharing the
house. Then divide that into the square footage used for storage.
--
Stu
http://DownToEarthLawyer.com
Alan
Apr 10, 2015, 7:20:06 PM4/10/15
to
On 4/10/15 8:09 AM, Lee Choquette wrote:
> Taxpayer rents a room in a house that is occupied by others in the other
> rooms. Taxpayer uses this room for personal use, and also to store the
> products he sells in his business. He has no other business location.
> Iiuc he can deduct the cost of this room even though it's not
> exclusively used for business, as it's used for inventory storage.
>
> What would be considered the "total area of home"? If it's just the room
> he's renting, then that would mean his rent is 100% deductible (he still
> shows a profit even so). Or is the "total area of home" the area of the
> entire house, even though it is not his to use, personal or business?
>
> Regardless of whether he uses the regular or simplified method, he still
> has to report the total area of his "home", even though it does not
> enter into the calculation of his deduction when using the simplified
> method. However, his deduction is greater under the regular method.
>
> Thanks,
> Lee
>
Here is how I would do it assuming that the t/p is only storing the
> Taxpayer rents a room in a house that is occupied by others in the other
> rooms. Taxpayer uses this room for personal use, and also to store the
> products he sells in his business. He has no other business location.
> Iiuc he can deduct the cost of this room even though it's not
> exclusively used for business, as it's used for inventory storage.
>
> What would be considered the "total area of home"? If it's just the room
> he's renting, then that would mean his rent is 100% deductible (he still
> shows a profit even so). Or is the "total area of home" the area of the
> entire house, even though it is not his to use, personal or business?
>
> Regardless of whether he uses the regular or simplified method, he still
> has to report the total area of his "home", even though it does not
> enter into the calculation of his deduction when using the simplified
> method. However, his deduction is greater under the regular method.
>
> Thanks,
> Lee
>
inventory in a space specifically identified for storage. E.g., he
stores the stuff along an empty five foot wall and the inventory is four
feet deep (20 sq ft of inventory space) and no personal belongs are
stored in that area. This then becomes the numerator in the space equation.
The denominator in the equation is the area of the room he rents plus
his share of the common area of the home.
E.g., he pays rent to occupy a room that is 150 sq. feet. His dedicated
inventory space takes up 20 sq. feet of the room. There are three
people occupying the home. The common are is 1050 sq. feet. His total
area of the home he occupies is 350 + 150 = 500 sq. ft. 20/500 = 4%.
That's the percentage of rent he can deduct.
--
Alan
http://taxtopics.net
Mark Bole
Apr 10, 2015, 7:30:04 PM4/10/15
to
On 2015-04-10 16:18, Alan wrote:
> On 4/10/15 8:09 AM, Lee Choquette wrote:
>> Taxpayer rents a room in a house that is occupied by others in the other
>> rooms. Taxpayer uses this room for personal use, and also to store the
>> products he sells in his business.
[...]
> On 4/10/15 8:09 AM, Lee Choquette wrote:
>> Taxpayer rents a room in a house that is occupied by others in the other
>> rooms. Taxpayer uses this room for personal use, and also to store the
>> products he sells in his business.
> The denominator in the equation is the area of the room he rents plus
> his share of the common area of the home.
>
> E.g., he pays rent to occupy a room that is 150 sq. feet. His dedicated
> inventory space takes up 20 sq. feet of the room. There are three
> people occupying the home. The common are is 1050 sq. feet. His total
> area of the home he occupies is 350 + 150 = 500 sq. ft. 20/500 = 4%.
> That's the percentage of rent he can deduct.
>
I wonder if it makes a difference whether he lives in the rented room or
> his share of the common area of the home.
>
> E.g., he pays rent to occupy a room that is 150 sq. feet. His dedicated
> inventory space takes up 20 sq. feet of the room. There are three
> people occupying the home. The common are is 1050 sq. feet. His total
> area of the home he occupies is 350 + 150 = 500 sq. ft. 20/500 = 4%.
> That's the percentage of rent he can deduct.
>
not. It's not a dwelling unit. The OP was careful to only state
"personal use", not "primary residence".
--
Mark Bole, EA
http://markboletax.com
Lee Choquette
Apr 18, 2015, 3:05:02 AM4/18/15
to
In article <mg9m7m$qn6$1...@dont-email.me>, Mark Bole <ma...@pacbell.net> wrote:
>I wonder if it makes a difference whether he lives in the rented room or
>not. It's not a dwelling unit. The OP was careful to only state
>"personal use", not "primary residence".
Sorry, I wasn't trying to carefully avoid saying it was the taxpayer's
>I wonder if it makes a difference whether he lives in the rented room or
>not. It's not a dwelling unit. The OP was careful to only state
>"personal use", not "primary residence".
dwelling unit while implying it was. The room is in fact the taxpayer's
dwelling. I should have said so clearly.
Thanks everyone for your analyses.
Lee
Mark Bole
Apr 18, 2015, 10:10:02 PM4/18/15
to
On 2015-04-18 00:02, Lee Choquette wrote:
> In article <mg9m7m$qn6$1...@dont-email.me>, Mark Bole <ma...@pacbell.net> wrote:
>> I wonder if it makes a difference whether he lives in the rented room or
>> not. It's not a dwelling unit. The OP was careful to only state
>> "personal use", not "primary residence".
>
> Sorry, I wasn't trying to carefully avoid saying it was the taxpayer's
> dwelling unit while implying it was. The room is in fact the taxpayer's
> dwelling. I should have said so clearly.
>
I think you're missing my point. A room is not dwelling unit unless it
> In article <mg9m7m$qn6$1...@dont-email.me>, Mark Bole <ma...@pacbell.net> wrote:
>> I wonder if it makes a difference whether he lives in the rented room or
>> not. It's not a dwelling unit. The OP was careful to only state
>> "personal use", not "primary residence".
>
> Sorry, I wasn't trying to carefully avoid saying it was the taxpayer's
> dwelling unit while implying it was. The room is in fact the taxpayer's
> dwelling. I should have said so clearly.
>
includes bath, bed, and kitchen facilities. Usually someone who rents
only a room also shares use of common areas such as the bathroom and
kitchen.
0 new messages