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1992 1993 1994 1995
Home office expense:
Rent $1,080 $1,080 $1,305 –-
Utilities 297 315 333 –-
Telephone –- –- 100 $720
Office supplies 200 400 1,120 100
Car and truck expense 3,500 4,002 2,850 2,108
Travel 120 180 –- –-
Meals and entertainment 640 960 425 300
Home Office Expenses
Section 162(a) allows a deduction for ordinary and necessary
business expenses paid or incurred during the taxable year in
carrying on a trade or business. Section 280A generally
prohibits the deduction of otherwise allowable expenses with
respect to the use of an individual taxpayer’s home. Section
280A(c)(1) provides a narrow exception to the disallowance of
home office deductions where a taxpayer can establish that a
portion of the home is used exclusively on a regular basis as:
(1) The taxpayer’s principal place of business,9 or (2) a place
of business which is used by clients or customers in meeting or
dealing with the taxpayer in the normal course of business.
9For home office expenses incurred in taxable years after
Dec. 31, 1998, Congress overruled Commissioner v. Soliman, 506
U.S. 168 (1993), in that the term "principal place of business"
now includes a place of business used by the taxpayer to perform
administrative or management activities related to the taxpayer's
trade or business if there is no other fixed location of the
taxpayer's trade or business where substantial administrative or
management activities are undertaken. See sec. 280A(c), as
amended by the Taxpayer Relief Act of 1997, Pub. L. 105-34, sec.
932(a), 111 Stat. 788, 881.
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