How do I deduct an out-of-town apartment used exclusively as a business office?

Forum|Forum|6 years ago
June 1, 2019
4 replies
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I own a home outside of Los Angeles County which is my primary residence. I also rent an apartment in Los Angeles that I maintain only for its utility in our business. My wife uses the apartment space as a photo studio and office. I use the apartment space as a recording studio and office. We frequently make trips to our LA apartment to work. So can we deduct 100% of the apartment just as we would a standard office? Does it make any difference if we sometimes sleep there? Since the primary purpose of the apartment is an office and not travel lodging, does it matter if our work goes beyond 1 year? Thanks.

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Best answer by bwa

The bottom line is, we use the apartment like an office, and I don't know if the IRS will look at it differently than an office, simply because it's typically residential.

No one here could predict how the IRS would look at it but, based on your description, I would present it on your tax return as rent on business property, the same as if you were renting an office from a separate vendor. With a deduction such as that, nothing beats good records that are often other than financial records. I would keep a detailed contemporaneous log of each time the apartment is used and for what purpose.

bwa

Employee

Where is the principal place of yours and your wife's businesses?

nteeteeAuthor

Employee

We primarily work from our house, not the apartment, which is outside of LA County. We only keep the apartment for when we need to do studio work. So to simplify: home office in our house outside of LA County; apartment/office inside of LA County when we need to do studio work or meet clients. Most work done at house. The bottom line is, we use the apartment like an office, and I don't know if the IRS will look at it differently than an office, simply because it's typically residential. Thank you.

bwaAnswer

Employee

The bottom line is, we use the apartment like an office, and I don't know if the IRS will look at it differently than an office, simply because it's typically residential.

nteeteeAuthor

Employee

Okay, thank you for your help. Sounds like good advice.

LEE1959

Go to IRS.GOV. The problem is living space vs office space. IRS.GOV your best place for your information.

nteeteeAuthor

Employee

I consulted IRS.gov long before asking my question here, and I couldn't get a clear answer. I understand the difference between living space and office space, but the problem is that our residential office is in a different country from our home, and I don't know how the IRS will view that.