"Exclusive" Use of Home Office May be Less Than Perfect

A recent tax court case sheds a little light on how flexible the "exclusive business use" requirement for a home office deduction can be.

In a rare taxpayer victory in the United States Tax Court, taxpayer Lauren Miller, who admitted to occasionally using portions of her home office space for nonbusiness purposes, was successful in defending against disallowance of her home office deduction. After analyzing the layout of her apartment and the business use of the home office, the court ruled that she was entitled to deduct one-third of her apartment rent and cleaning service charges for the year, as claimed in her income tax return.

Although this is a tax court summary decision in a case involving less than $50,000 and is not to be treated as precedent for any other case, taxpayer's victory hints that if facts and circumstances warrant, minor, "de minimis" personal use of a home office will not cause failure of the entire deduction.

This case is available on line at http://ustaxcourt.gov/InOpHistoric/MillerSummary.Guy.SUM.WPD.pdf

Mark S Gleason CPA
www.lakes-cpa.com