Publication 587 - Business Use Of Your Home - 2002 Page 3
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27See How To Get Tax Help near the end of this publica-
You do not meet the requirements of the exclusive use
tion for information about getting publications and forms.
test if you use the area in question both for business and
for personal purposes.
Example. You are an attorney and use a den in your
Qualifying for a Deduction
home to write legal briefs and prepare clients’ tax returns.
Your family also uses the den for recreation. The den is not
To deduct expenses related to the business use of part of
used exclusively in your profession, so you cannot claim a
your home, you must meet specific requirements. Even
business deduction for its use.
then, your deduction may be limited. Use this section and
Figure A, later, to decide if you can deduct expenses for
the business use of your home.
Exceptions to Exclusive Use
To qualify to claim expenses for business use of your
You do not have to meet the exclusive use test if either of
home, you must meet the following tests.
the following applies.
1) Your use of the business part of your home must be:
•
You use part of your home for the storage of inven-
tory or product samples (discussed next).
a) Exclusive (however, see Exceptions to Exclusive
•
Use, later),
You use part of your home as a day-care facility,
discussed later under Day-Care Facility.
b) Regular,
c) For your trade or business, AND
Storage of inventory or product samples. If you use
part of your home for the storage of inventory or product
2) The business part of your home must be one of the
samples, you can claim expenses for the business use of
following:
your home without meeting the exclusive use test. How-
ever, you must meet all the following tests.
a) Your principal place of business (defined later),
•
You sell products at wholesale or retail as your trade
b) A place where you meet or deal with patients,
or business.
clients, or customers in the normal course of your
•
trade or business, or
You keep the inventory or product samples in your
home for use in your trade or business.
c) A separate structure (not attached to your home)
•
you use in connection with your trade or busi-
Your home is the only fixed location of your trade or
ness.
business.
•
You use the storage space on a regular basis.
•
Additional tests for employee use. If you are an em-
The space you use is an identifiably separate space
ployee and you use a part of your home for business, you
suitable for storage.
may qualify for a deduction for its business use. You must
meet the tests discussed above plus:
Example. Your home is the only fixed location of your
business of selling mechanics’ tools at retail. You regularly
1) Your business use must be for the convenience of
use half of your basement for storage of inventory and
your employer, and
product samples. You sometimes use the area for per-
2) You do not rent any part of your home to your
sonal purposes. The expenses for the storage space are
employer and use the rented portion to perform serv-
deductible even though you do not use this part of your
ices as an employee.
basement exclusively for business.
Whether the business use of your home is for
Regular Use
TIP
your employer’s convenience depends on all the
facts and circumstances. However, business use
To qualify under the regular use test, you must use a
is not considered to be for your employer’s convenience
specific area of your home for business on a continuing
merely because it is appropriate and helpful.
basis. You do not meet the test if your business use of the
area is only occasional or incidental, even if you do not use
that area for any other purpose.
Exclusive Use
To qualify under the exclusive use test, you must use a
Trade or Business Use
specific area of your home only for your trade or business.
The area used for business can be a room or other sepa-
To qualify under the trade or business use test, you must
rately identifiable space. The space does not need to be
use part of your home in connection with a trade or busi-
marked off by a permanent partition.
ness. If you use your home for a profit-seeking activity that
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