In Uncategorized on 11/17/2021 at 16:40

We won’t see the final shakeout of this pandemic for years. Disruption is the flavor of the decade; much that we thought was settled long ago has come adrift. One effect is the strain on family life occasioned by the necessity of establishing a home office, and decreeing the exclusive business use thereof to preserve the deduction.

Who can tell what stress was placed on domestic tranquility by the lock on the bathroom door, the bathroom allegedly for business guests only, to the exclusion of even the nearest and dearest of the businessperson?

Today the unlocked bathroom costs Howard E. Steele the $370 he paid for the lighting fixture he placed in said office bathroom.

Judge Colvin: “Petitioners deducted $370 for a light fixture placed in the bathroom adjoining petitioner husband’s home office. Generally, under section 162(a), a taxpayer may deduct ordinary and necessary expenses incurred in carrying on a trade or business. Under section 262, however, items bought for personal, living, or family use generally cannot be deducted. Items bought for a business section of a residence cannot be deducted if that area is not exclusively used for the business (i.e., the area is for both personal and business use). See Sam Goldberger, Inc. v. Commissioner, 88 T.C. 1532, 1557 (1987). Petitioner husband testified that the bathroom was used not only by his clients but also by him when he was not working, his wife, and their personal guests. Thus, petitioners may not deduct the $370 they paid for the light fixture. See id.” 2021 T. C. Sum. Op. 38, at p. 9.

The rest of the case is the usual mix-and-match of illegible receipts and sketchy testimony, with equipment allegedly for the rental property delivered to the principal residence. Still, Howard and Tracy glean a couple extra bucks (hi, Judge Holmes) of basis and deductions at close of play.

Takeaway- the lockout continues, if you want the deduction.

Oh yes, the case is Howard E. Steele and Tracy M. Steele, 2021 T. C. Sum. Op. 38, filed 11/17/21.*

*Steele 2021 T C Sum Op 38 11 17 21


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