Tax Question: House Writeoff

[veneficus]

Thinking about buying a big house for dirt cheap in chicago, the only reason it's dirtcheap is because the taxes are 18k+. I was wondering if making the place 50% workplace, would that help any? Really want to take advantage of one of the most hurt real estate markets in the country, and soon. But 18k+ taxes is a lot on top of the mortgage, any ideals guys?

P.S. Sorry if the boobs didn't come out good, tried to give them in all shapes and sizes.

 

[barman]

you can write out whatever % of the square footage that is dedicated to office space. Anything out of the ordinary is usually a red flag (like 100%)

i am not a CPA just what i've been told

 

[efeezy]

^^ This is what my CPA does as well. You can also write off that % of anything else house related as well. Utilities, gardener, any maintenance etc. All of this is well within the writeoff rules.

 

[veneficus]

So I should probably stay under 35% to stay under the radar , so utilities, cable, mortgage, and most importantly house taxes? That's not too bad, do you guys make the best of this rule? Thanks, guys, I'll hit up my CPA tommorow, always cool to get a quick answer here though. Going to see a house right now!

 

[sweetweb]

Here is the most valuable advice you'll ever receive here.

Never take tax, corporate or legal advice on a marketing forum.

Talk to a professional, it will save yo ass.

 

[Sonny Forelli]

there are all sorts of games that are played surrounding that at all different levels.

some involve the standard (ala Turbotax/H&R block) % sq. ft and subsequent percentage of rent, some involve the (or other) owned companies paying the building owner (you? another company? a trust?) rent based on comparable workspace in the area which may be a large portion of the mortgage.


As the poster said above the ONLY people you want to ask this question to are a GOOD CPA or tax attorney.

Many of the people in life who tout how "clever" they are simply haven't been audited yet. The REAL clever ones have been and successfully defended multiple audits.

This is where the pros come in, not the forums.

 

[pocketrockets]

The IRS has all the info on their website regarding the home office reduction.

Home Office Deduction

Form 8820 shows how to calculate it

If you only use a desk and a computer you probably don't want to claim 50% of the house as a business (unless you store inventory for the business)

I file this form yearly and it really makes a big difference in taxes.