Self employed as sole proprietor, was using 1/3 of home as home office. Have moved across state line to new house on July 1st, but keeping old house solely to see existing clientele for the foreseeable future, is now 100% business use. Since it is no longer home and I have a new home office how do I report the 100% business use and expenses on 1040/Schedule C?

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    Be careful with this one. Using a house solely for business may cause you trouble with zoning laws, with your insurance, and your mortgage holder if any. – DJClayworth Dec 19 '15 at 4:26
  • Simpler than that, How could one claim the bedrooms, living room, etc are used for business? You can abandon the 2/3 you used to live in, but the house is still 1/3 business. The 2/3 doesn't automatically drop off. – JTP - Apologise to Monica Jun 12 '16 at 22:04

As DJClayworth said, be very careful with this one!

The property is a residence, not a business location. Given that, it is almost a certainty that the IRS is not going to let you claim 100% of the expenses for the home as a business expense, even if nobody's actually living there.

You may get away with doing this for a period of time and not run into zoning or other issues such as those DJ mentioned, but it's like begging for trouble. You run the very real risk of being audited if you try to do what you're proposing, and rest assured, whatever you saved in taxes will disappear like smoke in the wind under an audit.

That being said, there's no reason you can't call a tax service and ask a simple question, because in answering it they're going to hope to gain your business. It'd be well worth the phone call before you land yourself in any hot water with the IRS. I can tell you that I'd rather have a double root canal with no anesthetic than go through an audit, even when I didn't do anything wrong! (grin)

Good luck!

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