Home based business separate structure

If you have a separate freestanding structure on your property, you can treat it as a home office if you use it exclusively and regularly for your home office activity. A separate structure may be a garage, a studio, a greenhouse, or even a barn. It need not be an office in order for expenses to be deducted as home office expenses. Nor does the separate structure need be the principal place of your business activity. Further, it need not be a place to meet or deal with patients, clients, or customers in the normal course of your business. It simply must be used in connection with your business.

Example of home based business separate structure

You own a flower shop in town. You have a greenhouse on your property in which you grow orchids. You can deduct the home office expenses of the greenhouse.

What is a separate structure?

The answer is not always clear. In one case, the Tax Court treated a separate structure in a taxpayer's backyard as part of the house itself because of the close relationship to it. If your local real estate law treats a separate structure as appurtenant to the house, then it is not a separate structure for purposes of the home office deduction rules. Examples of separate structures that may qualify as home offices include an artist's studio, a florist' s greenhouse, and a carpenter's workshop.