What is Qualified Home Office?

To qualify for deductions, the area in the home used for business must be used regularly and exclusively: [IRC Sec. 280A(c)(1)]

  1. As the principal place of business (including administrative use),
  2. As a place to meet with clients in the normal course of business or
  3. In connection with the business if it is a separate structure not attached to the taxpayer’s personal residence.

Example: Gail is an attorney and uses a den in her home to write legal briefs and prepare client documents. Her family also uses the den to watch TV. Because the den is not used exclusively for business, Gail cannot claim a deduction for the business use of the den.