Is new flooring for my home office tax deductible?

5 Comments

1. 

   card-ron

   January 6, 2012

   If this space otherwise qualifies as a home office, new flooring is tax deductible. However, since this is an improvement, it must be depreciated. Both materials and labor (assuming you paid someone else for the labor) are figured as the cost basis for depreciation.

   Reply
2. 

   Road Runner

   January 6, 2012

   I would say that it depends on the reason for the new flooring. If its just to ‘upgrade’ from a previous flooring then the IRS may not look too kindly on that. HOWEVER, you may be able to qualify it as a ‘repair’ of existing flooring. Then in that case it would be deductible. If you pay someone to install it then the cost of labor is also deductible, if you install it yourself then you cant deduct the labor, you can deduct the material expense though.

   All of this assumes that your home office space meets the criteria according to the IRS to receive a deduction. Link to basic qualification included in sources.

   Hope this helps
   -Jeremy

   Reply
3. 

   ernesthinton

   January 6, 2012

   Your Accounting GURU Here!!!

   A floor is a structural component of your property… If you are installing a new floor, that floor is a Capital Expenditure that must be Depreciated. Look at your (CLADR).. Class Life Asset Depreciation Range for floors.

   How Do You Treat Repairs and Improvements?

   If you improve depreciable property, you must treat the improvement as separate depreciable property. Improvement means an addition to or partial replacement of property that adds to its value, appreciably lengthens the time you can use it, or adapts it to a different use.

   You generally deduct the cost of repairing business property in the same way as any other business expense. However, if a repair or replacement increases the value of your property, makes it more useful, or lengthens its life, you must treat it as an improvement and depreciate it.

   Example.

   You repair a small section on one corner of the roof of a rental house. You deduct the cost of the repair as a rental expense. However, if you completely replace the roof, the new roof is an improvement because it increases the value and lengthens the life of the property. You depreciate the cost of the new roof.

   Improvements to rented property. You can depreciate permanent improvements you make to business property you rent from someone else.

   Property Used in Your Business or Income-Producing Activity

   To claim depreciation on property, you must use it in your business or income-producing activity. If you use property to produce income (investment use), the income must be taxable. You cannot depreciate property that you use solely for personal activities.

   You do not qualify for Section 179 Expensing because of the reasons below:

   To qualify for the section 179 deduction, your property must be one of the following types of depreciable property.

   Tangible personal property.

   Other tangible property (except buildings and their structural components) used as:

   An integral part of manufacturing, production, or extraction or of furnishing transportation, communications, electricity, gas, water, or sewage disposal services,

   A research facility used in connection with any of the activities in (a) above, or

   A facility used in connection with any of the activities in (a) for the bulk storage of fungible commodities.

   Single purpose agricultural (livestock) or horticultural structures. See chapter 7 of Publication 225 for definitions and information regarding the use requirements that apply to these structures.

   Storage facilities (except buildings and their structural components) used in connection with distributing petroleum or any primary product of petroleum.

   Off-the-shelf computer software.

   Please review the attached links so that you can do this properly…

   Your Accounting GURU

   http://www.irs.gov/pub/irs-pdf/f4562.pdf

   Reply
4. 

   MisterZero

   January 6, 2012

   As a former IRS Tax Auditor…I agree with ‘card-ron’ and ‘ernesthi…’ that this is an improvement and must be ‘capitalized’ rather than written off as an expense. Having said that, however, I see no reason it would not qualify for Section 179 and you could likely depreciate it in full in the year you placed it in service.

   You might want to look over IRS Publication 587 – Business Use of Your Home for more information. Click the first link below to pull up an Adobe copy you can save or print as you need.

   G’Luck…

   Mike Womack, Sr. Partner
   Zero Degrees Tax LLP
   Moore, OK

   Reply
5. 

   Wondering...

   January 31, 2012

   We put new tile flooring in our home in 2011. Our floor had ruined due to our dishwasher flooding twice. We installed it ourselves. I kept the receipt for the expenses, and wondered if we could deduct this as home repairs/expenses. Thanks!

   Reply