Home Office
for Business Use
The deductibility of home office costs to those
situations where:
•
the work space is the individual's principal place of
business; or
•
the space is used exclusively for the purpose of earning
income from business and is used on a regular and continuous basis for
meeting clients, customers, or patients of the individual.
The following expenses can be
deductible when the conditions for deductibility are met:
•
rent,
•
mortgage interest,
•
property taxes,
•
property insurance,
•
utilities, and
•
various operating costs.
Expenses
must be apportioned between business and non-business use on a reasonable
basis, usually on the basis of floor space used. Individuals
are generally advised not to deduct CCA, as this is likely to cause the
business portion of the residence to lose its principal residence status.
Home office costs cannot
create or increase a business loss. As a result, the total deduction will
be limited to the amount of net business income calculated without reference
to the home office.
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