Which of the following statements regarding the home office deduction is true?
A) In order to qualify for the deduction, a portion of the taxpayer's home must be used regularly and exclusively to meet with clients or customers.
B) A home office deduction is not allowed for using the home office for administrative or management activities only.
C) The home office deduction is limited to the taxable income of the business before the deduction.
D) A depreciation deduction is not allowed for a home office.

Question

Quizplus · Accepted Answer

The home office deduction is indeed limited to the taxable income of the business before the deduction. This means that the deduction cannot create a loss for the business; it can only reduce taxable income to zero. Options A, B, and D are incorrect because they misstate the requirements or allowances for the home office deduction. For example, a home office can qualify for the deduction if it is used regularly and exclusively for business, not just for meeting clients. Administrative or management activities can also qualify, and depreciation is an allowable part of the deduction.

Which of the Following Statements Regarding the Home Office Deduction