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Question

Can i have a 2019 credit or deduction for a sun room i built?

Forum|Forum|5 years ago
September 25, 2020
2 replies
0 views

i converted my patio into a sun room which will serve as a work room or office. can i get deduction or credit for the actual cost of building the sun room?

TurboTax Online

Employee

Q. Can i have a 2019 credit or deduction for a sun room i built?

A. No. In order to qualify for a home office, it would have to be used 'Regularly and Exclusively' as a business, not as a W-2 employee. Even then, the cost could not be deducted, outright, but only depreciated over 39 years (not 27.5 years).

Employee

The cost of any home improvement is added to the cost-basis of your home and may reduce your capital gains when you sell the home.

Then, you could possibly claim a home office deduction for the space, if you met all the rules, but even then the most you could do is claim a deduction for depreciation over 27.5 years, which has to be paid back when you sell the home. And you don't qualify for the home office deduction unless you are self-employed, AND the office is your regular place of business, and you use that sunroom exclusively for work and no other personal uses.

Employee

@Hal_Al while there are situations where a qualifying HO for someone who is self-employed would be depreciated over 27.5 years, wouldn't it be 39 years normally?

@bronne-dytoc If you added on a sun room, I seriously question it's for the "exclusive use" for any business you own. Therefore I would expect the IRS to question it to. Just my two cents.

Employee

@Carl11_2 is correct; the depreciation period is 39 years, not 27.5.

Reference: https://www.bankrate.com/finance/money-guides/home-office-can-have-hidden-tax-costs-1.aspx

“The depreciation life of your home office is 39 years, since it’s business,” says the Illinois CPA. The IRS has determined the costs associated with business real property must be spread out, i.e., depreciated, over that time period. But often, home office taxpayers misread the rules".

“Many people use the 27.5-year residential property schedule since the office is in their home,” says Tollaksen. “But in the IRS’s eyes, it’s a business regardless of its physical location, so business tax rules apply.”