Publication 587 - Business Use Of Your Home - 2002
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27Department of the Treasury
Contents
Internal Revenue Service
Important Changes . . . . . . . . . . . . . . . . . . . . . . . . .
1
Publication 587
Important Reminder . . . . . . . . . . . . . . . . . . . . . . . .
2
Cat. No. 15154T
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Business Use
Qualifying for a Deduction . . . . . . . . . . . . . . . . . . .
3
Figuring the Deduction . . . . . . . . . . . . . . . . . . . . . .
6
of Your Home
Deducting Expenses . . . . . . . . . . . . . . . . . . . . . . .
8
Depreciating Your Home . . . . . . . . . . . . . . . . . . . .
9
(Including Use by
Day-Care Facility . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Day-Care Providers)
Sale or Exchange of Your Home . . . . . . . . . . . . . . 12
Business Furniture and Equipment . . . . . . . . . . . . 12
Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
For use in preparing
Where To Deduct . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2002
Returns
Schedule C Example . . . . . . . . . . . . . . . . . . . . . . . 18
Worksheet To Figure the Deduction for
Business Use of Your Home . . . . . . . . . . . . . . 23
Instructions for the Worksheet . . . . . . . . . . . . . . . 24
How To Get Tax Help . . . . . . . . . . . . . . . . . . . . . . . 25
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Important Changes
New publication on home-based business tax avoid-
ance schemes. The Internal Revenue Service has re-
leased Publication 4035, Home-Based Business Tax
Avoidance Schemes. The schemes described in the publi-
cation claim to offer tax relief but actually result in illegal tax
avoidance. To find out more about home-based business
schemes, order Publication 4035 by calling
1–800 –829 –3676 or visit
Special depreciation allowance. You can take a special
depreciation allowance (or Liberty Zone depreciation al-
lowance) for qualified property (or Liberty Zone property)
you place in service during 2002. The allowance is an
additional deduction of 30% of the property’s depreciable
basis. For more information, see chapter 3, Claiming the
Special Depreciation Allowance (or Liberty Zone Deprecia-
tion Allowance) in Publication 946, How to Depreciate
Property.
Increased section 179 deduction for enterprise zone
businesses. You may be able to claim an increased sec-
tion 179 deduction if your business qualifies as an enter-
prise zone business. The increase can be as much as
$35,000 (up from $20,000), but it cannot be more than the
cost of qualified zone property which is section 179 prop-
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