Question

Home Office Accessory Building Construction Cost Deduction

Forum|Forum|5 years ago
April 8, 2021
1 reply
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During 2020 I built an accessory building to use as a home office. The building is an entirely separate structure from my house, but is located on the same property as my home. I use the building for work only. The space is not used for any other purpose. I know I can take a home office deduction based on square footage. Is it possiblt to deduct the construction costs of this building since it was built in 2020? I am an independent contractor and I do work from home, but I have not previously taken a home office deduction since prior to 2020 I used shared workspace away from home. I trying to figure out the best way to account for this building for 2020 and for future years as a home office.

J

JeffreyR77

No, you cannot deduct the construction costs in 2020. The construction costs are capital costs.

If the construction costs were $50,000 you can depreciate $50,000 over 39 years.

You are able to deduct the operating expenses of this space if separately metered or by allocating the total property's utilities if not separately metered.

You can have the accessory building appraised separately for property taxes and insurance purposes as well.