Depreciation of my home office, when I prev claimed it, stopped for many years, and want to resume?

Question

I had a tough time phrasing the question, so I apologize for any confusion.

Basically, I claimed the home office deduction when I first started my business, from 2007-2012. Starting in 2013 I leased a commercial office, and from 2013-2023 I didn't claim a home office. Starting in 2024, however, I am back to working from home and would like to claim the deduction.

I'm assuming that, on my 2024 tax return, I'll need to somehow account for the home office depreciation that I claimed from 2007-2012, but I have no idea how to go about it. I've read publication 587 looking for a way to handle this situation but there is no reference of anything similar.

Another question is how to answer when asked about the date I initially started using the home office. Is it a literal question, meaning the date way back in 2007? Or are they asking for the date I began using the home office during the tax year (e.g., 1/1/2024 for my 2024 return)?

If this is relevant to my question, yes, the home office deduction claimed in previous years is the same home I have now.

bscivolette · Answer

Thanks, Rachels! I had a feeling it would be problematic and/or complicated. I think your suggestion to use the simplified method is the right way to go. The path of least resistance.

rachels · Answer

Hi bscivolette,

The date our software asks for is the date you first started using the home office for your business. If it is a different business that you are using the home office for now, then you would enter the date you first started using it for this particular business.

Our software will calculate your prior depreciation based on the date you enter there (if you choose to use the actual expense method, rather than the simplified method), so that would cause an issue in your situation. You may want to consider using the Simplified Method for your home office, as that will give you a deduction based on the square footage of your office. There is no depreciation deduction with the Simplified Method, so that would also simplify things.

You will want to keep track of the prior depreciation you took for the home office for if/when the home is eventually sold. The depreciation you took will affect the gains on the eventual sale of your home.