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» From: Alexandria, KY Dear TaxMama, Hope you can help. If you claim office in home, do you HAVE to take depreciation on the house? I know if you sell you have the Form 4797 and it says "allowed or allowable" on it and it also reduces the basis even if not taken. I am confused whether you MUST take it and what happens if you don't. Thanks for you help. Barb Dear Barb, Yup. That's one of the drawbacks ... sad thing. When it comes to depreciation, it's 'allowed or allowable.' Which means, if you didn't take it, but should have, you need to treat your basis as if you had taken it. And yes, when you sell the house, you will have to use Form 4797 (See 'Decision-Making Time) I will be writing a more in-depth, follow-up article on this next month. Stay tuned. Your TaxMama Eva Rosenberg Click Here for TaxMama's Honor System |
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