Expenses for Business Use of Your Home

Part of Your Home Used for Business

1 Area used exclusively for business (see instructions). Include area used for inventory storage or

as a day-care facility that does not meet exclusive use test

2 Total area of home

3 Divide line 1 by line 2. Enter the result as a percentage

● For day-care facilities not used exclusively for business, also complete lines 4–6.

● All others, skip lines 4–6 and enter the amount from line 3 on line 7.

4 Total hours facility used for day care during the year. Multiply days used by

number of hours used per day

5 Total hours available for use during the year (365 days x 24 hours) (see instructions)

6 Divide line 4 by line 5. Enter the result as a decimal amount

7 Business percentage. For day-care facilities not used exclusively for business, multiply line 6 by

line 3 (enter the result as a percentage). All others, enter the amount from line 3 ©

Figure Your Allowable Deduction

8 Enter the amount from Schedule C, line 29. (If more

than one place of business, see instructions.)

9 Casualty losses

10 Deductible mortgage interest

11 Real estate taxes

12 Add lines 9, 10, and 11

13 Multiply line 12, column (b) by line 7

14 Add line 12, column (a) and line 13

15 Subtract line 14 from line 8. If zero or less, enter -0-

16 Excess mortgage interest (see instructions)

17 Insurance

18 Repairs and maintenance

© File with Schedule C (Form 1040).

© See instructions on back.

OMB No. 1545-1256

Department of the Treasury

Internal Revenue Service

Attachment

Sequence No. 66

Form 8829

Name of proprietor

(a) Direct expenses (b) Indirect expenses

19 Utilities

20 Other expenses

21 Add lines 16 through 20

22 Multiply line 21, column (b) by line 7

23 Carryover of operating expenses from 1990

24 Add line 21 in column (a), line 22, and line 23

25 Allowable operating expenses. Enter the smaller of line 15 or line 24

26 Limit on excess casualty losses and depreciation. Subtract line 25 from line 15

27 Excess casualty losses (see instructions)

28 Depreciation of your home from Part III below

29 Carryover of excess casualty losses and depreciation from 1990

30 Add lines 27 through 29

31 Allowable excess casualty losses and depreciation. Enter the smaller of line 26 or line 30

32 Add lines 14, 25, and 31

33 Casualty losses included on lines 14 and 31. (Carry this amount to Form 4684, Section B.)

34 Allowable expenses for business use of your home. Subtract line 33 from line 32. Enter here and

on Schedule C, line 30 ©

35 Enter the smaller of your home’s adjusted basis or its fair market value (see instructions)

36 Value of land included on line 35

37 Basis of building. Subtract line 36 from line 35

38 Business basis of building. Multiply line 37 by line 7

Depreciation of Your Home

39 Depreciation percentage (see instructions)

40 Depreciation allowable. Multiply line 38 by the percentage on line 39. Enter here and on line 28 above

41 Operating expenses. Subtract line 25 from line 24. If less than zero, enter -0-

42 Excess casualty losses and depreciation. Subtract line 31 from line 30. If less than zero, enter -0-

Carryover of Unallowed Expenses to 1992

For Paperwork Reduction Act Notice, see back of form. Cat. No. 13232M Form 8829 (1991)

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Part IV

Part III

Part I

Part II

Your social security number

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Form 8829 (1991) Page 2

General Instructions

Paperwork Reduction Act Notice.—We ask for

the information on this form to carry out the

Internal Revenue laws of the United States. You

are required to give us the information. We need

it to ensure that you are complying with these

laws and to allow us to figure and collect the

right amount of tax.

The time needed to complete and file this

form will vary depending on individual

circumstances. The estimated average time is:

Recordkeeping, 52 min.; Learning about the

law or the form, 7 min.; Preparing the form, 1

hr., 13 min.; and Copying, assembling, and

sending the form to the IRS, 20 min.

If you have comments concerning the

accuracy of these time estimates or suggestions

for making this form more simple, we would be

happy to hear from you. You can write to both

the IRS and the Office of Management and

Budget at the addresses listed in the instructions

for Form 1040.

Purpose of Form

Use Form 8829 to figure the allowable expenses

for business use of your home on Schedule C

(Form 1040) and any carryover to 1992 of

amounts not deductible in 1991.

You must meet specific requirements to

deduct expenses for the business use of your

home. Even if you meet these requirements, your

deductible expenses are limited. For details, get

Pub. 587, Business Use of Your Home.

Who May Deduct Expenses for

Business Use of a Home

General rule.—You may deduct business

expenses that apply to a part of your home only

if that part is exclusively used on a regular basis:

● As your principal place of business for any of

your trades or businesses; or

● As a place of business used by your patients,

clients, or customers to meet or deal with you in

the normal course of your trade or business; or

● In connection with your trade or business if it

is a separate structure that is not attached to

your home.

Exception for storage of inventory.—You may

also deduct expenses that apply to space within

your home if it is the only fixed location of your

trade or business. The space must be used on a

regular basis to store inventory from your trade

or business of selling products at retail or

wholesale.

Exception for day-care facilities.—If you use

space in your home on a regular basis in your

trade or business of providing day care, you may

be able to deduct the business expenses even

though you use the same space for nonbusiness

purposes.

Specific Instructions

Part I

Lines 1 and 2.—You may use square feet to

determine the area on lines 1 and 2. If the rooms

in your home are about the same size, you may

figure area using the number of rooms instead of

square feet. You may use any other reasonable

method if it accurately figures your business

percentage on line 7.

Part II

Enter as direct or indirect expenses only

expenses for the business use of your home

(i.e., expenses allowable only because your

home is used for business). Other expenses,

such as salaries, supplies, and business

telephone expenses, which are deductible

elsewhere on Schedule C, should not be entered

on Form 8829.

Direct expenses benefit only the business

part of your home. They include painting or

repairs made to the specific area or room used

for business. Enter 100% of your direct

expenses on the appropriate expense line in

column (a).

Indirect expenses are for keeping up and

running your entire home. They benefit both the

business and personal parts of your home.

Generally, enter 100% of your indirect expenses

on the appropriate expense line in column (b).

Exception: If the business percentage of an

indirect expense is different from the percentage

on line 7, enter only the business part of the

expense on the appropriate line in column (a),

and leave that line in column (b) blank. For

example, your electric bill is $800 for lighting,

cooking, laundry, and television. If you

reasonably estimate $300 of your electric bill is

for lighting and you use 10% of your home for

business, enter $30 on line 19 in column (a) and

leave line 19 in column (b) blank.

Lines 9, 10, and 11.—Enter only the amounts

that would be deductible whether or not you

used your home for business (i.e., amounts

allowable as itemized deductions on Schedule A

(Form 1040)).

Part III

Lines 35 through 37.—Enter on line 35 the cost

or other basis of your home, or if less, the fair

market value of your home on the date you first

used the home for business. Do not adjust this

amount for depreciation claimed or changes in

fair market value after the year you first used

your home for business. Allocate this amount

between land and building values on lines 36

and 37.

Line 39.—If you first used your home for

business in 1991, enter the percentage for the

month you first used it for business.

Jan.

2.778%

2.513%

2.249%

1.984%

1.720%

If you first used your home for business before

1991 and after 1986, enter 3.175%. If the

business use began before 1987 or you stopped

using your home for business before the end of

the year, see Pub. 534, Depreciation, for the

percentage to enter.

1.455%

1.190%

0.926%

0.661%

0.397%

0.132%

Line 20.—If you rent rather than own your home,

include the rent you paid on line 20, column (b).

3.042%

Feb.

March

April

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Line 4.—Enter the total number of hours the

facility was used for day care during the year.

Example. Your home is used Monday through

Friday for 12 hours per day for 250 days during

the year. It is also used on 50 Saturdays for 8

hours per day. Enter 3,400 hours on line 4 (3,000

hours for weekdays plus 400 hours for Saturdays).

Line 8.—If all of the gross income from your

trade or business is from the business use of

your home, enter on line 8 the amount from

Schedule C, line 29.

If part of the income is from a place of

business other than your home, you must first

determine the part of your gross income

(Schedule C, line 7) from the business use of

your home. In making this determination,

consider the amount of time you spend at each

location as well as other facts. After determining

the part of your gross income from the business

use of your home, subtract from that amount the

total from Schedule C, line 28. Enter the result

on line 8 of Form 8829.

On line 10, include only mortgage interest

that would be deductible on Schedule A and

that qualifies as a direct or indirect expense. Do

Treat casualty losses as personal expenses

for this step. Figure the amount to enter on line

9 by completing Form 4684, Section A. When

figuring line 17 of Section A, enter 10% of your

adjusted gross income excluding the gross

income from business use of your home and the

deductions attributable to that income. Include

on line 9 of Form 8829 the amount from Form

4684, Section A, line 18. See line 27 to deduct

part of the casualty losses not allowed because

of the limits on Form 4684, Section A.

Line 16.—If the amount of home mortgage

interest you deduct on Schedule A is limited,

enter the part of the excess mortgage interest

that qualifies as a direct or indirect expense. Do

not include mortgage interest on a loan that did

not benefit your home (explained above).

Line 23.—If you were unable to deduct all of

your 1990 operating expenses due to the limit

on the deductible amount, enter on line 23 the

amount of operating expenses you are carrying

forward to 1991.

Line 27.—Multiply your casualty losses in excess

of the amount on line 9 by the business

percentage of those losses and enter the result.

Line 29.—If you were unable to deduct all of

your 1990 excess casualty losses and

depreciation due to the limit on the deductible

amount, enter the amount of excess depreciation

and casualty losses you are carrying forward to

1991.

Show on an attached schedule the cost or

other basis of additions and improvements

placed in service after you began to use your

home for business. Do not include any amounts

on lines 35 through 38 for these expenditures.

Instead, see the instructions for line 40.

Complete and attach Form 4562, Depreciation

and Amortization, if you first used your home for

business in 1991 or you are depreciating

additions or improvements placed in service in

1991. If you first used your home for business in

1991, enter on Form 4562, in column (c) of line

14h, the amount from line 38 of Form 8829.

Then enter on Form 4562, in column (g) of line

14h, the amount from line 40 of Form 8829.

Line 40.—Include on line 40 depreciation on

additions and improvements placed in service

after you began using your home for business.

See Pub. 534 to figure the amount of

depreciation allowed on these expenditures.

Attach a schedule showing how you figured

depreciation on any additions or improvements.

Write “See attached” below the entry space. Do not file or use that Form 4684 to figure

the amount of casualty losses to deduct on

Schedule A. Instead, complete a separate Form

4684 to deduct the personal portion of your

casualty losses.

Line 5.—If you started or stopped using your

home for day care in 1991, you must prorate the

number of hours based on the number of days

the home was available for day care. Cross out

the preprinted entry on line 5. Multiply 24 hours

by the number of days available and enter the

result.

not include interest on a mortgage loan that did

not benefit your home (e.g., a home equity loan

used to pay off credit card bills, to buy a car, or

to pay tuition costs).