Office in Home

Exclusive Use

Separately identifiable space

Need not be partitioned

Exceptions

Storage of inventory

Sell products at wholesale or retail

ONLY fixed business location

Used on regular basis

Separately indentified suitable space

Daycare Facility

Regular Use

Consistent basis

Not occasional or incidental

Case by case basis

Trade / Business Use

Profit-seeking activity

Connection to business activity

Principal Place of Business

Consider if Multiple Locations

Relative importance of activities at each loacation

Amount of time spent at each location

Where admin & mgmt activities are conducted is critical (see below)

Use MUST be exclusive and regular for admin or mgmt activities

Billing customers, clients, or patients

Keeping book and records

Ordering supplies

Setting up appointments

Forwarding orders or writing reports

Must be ONLY location where substantial admin & mgmt activities are conducted

Exceptions

Service provider conduting admin acvities at other locations

Non-fixed locations like a car or hotel room

Occasional and minimal admin done at fixed location oustide home

Substantial non-admin, non-mgmt oustide home

Suitable space is available oustide home, but choose home

Exceptions if above not met

Physically meet with clients, patients, or customers

MUST be substantial and integral to business

Separate structure from dwelling unit

Employee Requirements

MUST be for convenience of employer

MUST NOT rent any part of home to employer

Office in Home Deduction - Requirements: Courtesy of Parsons & Grinage CPAs