Discussion Archives:Business Use of Home for Dog Breeder

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Discussion Forum Index --> Consumer Questions --> Business Use of Home for Dog Breeder


Canaanland (talk|edits) said:

2 February 2007
Hello Everyone,

I have a question concerning Business Use of the Home for a Dog Breeding.

I use my dining room for my office. This room is also used for personal use. I was told by a Tax consultant that i can use 50% of this room for Business Use of my Home.

However, i was looking at the instructions for form 8829, as well as Publication 587, and I read that unless the room us used on a regular basis,i do not qualify. And if the room is also used personal use, i do not qualify.

Please help.

Thank you,

Julie

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Solomon (talk|edits) said:

3 February 2007
If you use an area (not necessarily the entire room) exclusively and regularly for business use e.g. administrative purposes or meeting clients and you have no other business location to do this, then it is deductible.

Death&Taxes (talk|edits) said:

3 February 2007
It would seem to me 50% in a room with a table that seats 4 or more would be very difficult to justify, but the use of a corner of the room would give something as long as its use were exclusively for business. Courts have not required walls, partitions or the like to separate the area. I had a concert pianist with a 3 room apartment plus bath. The Steinway took a good third or more of the living room and IRS accepted that, plus the area occupied by cases that held scores and the like. They would not accept an area with music stands, saying they could be taken down or put up as needed. The square feet went from 33% to 30% but it gives some idea.

Canaanland (talk|edits) said:

3 February 2007
Thank you everyone,

I was told by a Tax Preparer from a known Co (wife is a hobby show dog breeder) that I could use 50 % of the room which would be 5% of the square footage of my home.

The desk is in the corner. This is where I do my business on a regular basis. however, it is also where other family members do their thing.

Because of this reason, I do not deduct any of the office equipment as expenses.

Also, we removed the table & chairs, and set up a puppy play area about 3 times last year (approximately 12 weeks). (this is probably irrelevant)

People came to my home to pick up their puppies, (some of the puppies were shipped) We had 3 litters last year. Not an every day thing, for we cannot control when or if puppies will be born.

This is my chief place of business.

When checking out pub #587, I am now confused. I need clarity, black or white, no shade of gray.

Thank you so much for your knowledge.


Julie

Kevinh5 (talk|edits) said:

3 February 2007
you fail the exclusive use test - no deduction

Death&Taxes (talk|edits) said:

3 February 2007
Kevin hits it: that use must be exclusive, not just when you are doing business. It is your place of business for other tests but not to deduct a percentage of your home under Sec. 280A

Canaanland (talk|edits) said:

3 February 2007
Please elaberate!!

I do not understand.

Breeding Dogs is a home based business for some.

Full time breeders may have a specific place of business, whereas hobby breeders do not. Both can make a profit.

How can i count the mileage I use specifically for dog business, if i do not have a designated area to call my space.

Death&Taxes (talk|edits) said:

3 February 2007
You do not have to claim a home office to deduct the mileage, whether the failure to claim is because of non-exclusive use of space, or because the expense of that designated space is too little to pass the 2% test for an employee or any other reason.

Canaanland (talk|edits) said:

3 February 2007
I was told by the tax consultant that i had to have a place designated in my home, for my office in order to deduct the mileage.

so is it best to buy all new office equipment, and move to a different area of the room, exclusively for my office work? IF that is the case, i will use that as expenses.

Death&Taxes (talk|edits) said:

3 February 2007
The equipment does not depend on exclusive use of the area of the house to be deductible. I know the other issue has been debated on this board. I doubt my answer about not requiring the deductibility of home office is in Publication 463 but I know it has been on this site.

Death&Taxes (talk|edits) said:

3 February 2007
Rev. Rul. 99-7 spells this out, saying 'principal place of business within the meaning of Sec. 280A(c)(1)(A) the taxpayer may deduct daily transportation expenses......' The point is that the definition of home office is only used to define the usage of Home Office.

Canaanland (talk|edits) said:

4 February 2007
Thank you for the clarification. After reading Publication 587 again, I see clearly now:)

Someday, i would like to have a space of my own for my office work, but as it stands now, we have limited space, and only 1 computer.

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