Discussion:Home office deduction carryover from 2005

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Discussion Forum Index --> Tax Questions --> Home office deduction carryover from 2005


Wkstaxprep (talk|edits) said:

22 February 2007
I met with a new client referral (newlyweds).

Spouse did her own return last year, by hand, with home office deduction. Her home office she used to offset $5,000 in 1099-misc and now has an unused c/o of $9,000 for this year. However, this year there is no 1099 income. Last year's home office was really for her full time w-2 job as an attorney but i don't believe she realized that she should have used the home office deduction on form 2106 as an offet against her wages, as opposed to the mimimal schedule c.

An interesting point is she has an unused $9,000 home office c/o from a schedule c. This year the spouse is once again taking the same home office deduction which is directly related to her w-2.

My question is: Does she lose the $9,000 home office carryover? I don't believe she can use the $9,000 from last year's schedule c and conveniently use it against her wages this year on form 2106. The only thing i might consider is amending her 2005 return and reporting the home office correctly against her w-2 income for 2005. This would result in an amended refund and would also result in an accurate carryover from 2005 to 2006 of any remaining home office deduction onto the 2006 form 2106. I would now start with a clen accurate slate for the 2006 return (i would imagine the amended return should be done asap and mailed in at least a few weeks before the 2006 return ?)

Does this make any sense, i may have confused myself now, lol :)

Thank you for your time.

Will

Death&Taxes (talk|edits) said:

22 February 2007
I think you first make sure her usage was for the convenience of her employer Sec. 280A else she could lose the office itself since it must qualify for both purposes. Assuming that works, I would think the prior year should be amended.

Deback (talk|edits) said:

February 22, 2007
I agree with D&T that the usage must have been for the convenience of her employer and that you should amend the 2005 returns, including the state, but there's no need to mail them a few weeks before the 2006 return. You can mail them at the same time.

Wkstaxprep (talk|edits) said:

23 February 2007
Thank you very much for your help!

Will

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