The dilemma: should a contractor or equipment dealer claim a tax deduction for the use of a home office/studio and risk losing future tax breaks when it is sold, or ignore the major expenses of operating the pressure cleaning business at/from home and reap tax-free gains down the road? A unique provision of our tax rules allows a homeowner to exclude up to USD250,000 (USD500,000 for some joint returns) of the gain that results from the sale of their home. Unfortunately, the Section 121 exclusion does not apply to the portion of that residence used as a base or home office for the pressure cleaning business. Fortunately, the IRS recently outlined a unique procedure that can be used to create your own "loophole" and save a bundle in the process. First, does your home office/studio qualify for a tax deduction?
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