Should the deductible portion of home office mortgage interest and property taxes come through as deductible on form 8829 for a schedule c loss?

[rosael]

I have a tax return with a schedule c loss. They have a home office with mortgage interest, property taxes, depreciation, etc. all of the deductible portion of the interest and prop taxes are still coming through with the loss. Is this something new? Isn't that supposed to carry forward? Everything else is carrying forward.

[Just-Lisa-Now-]

Its correct, thats how its always worked.

[TaxGuyBill]

It depends ... is the taxpayer Itemizing on Schedule A?

[rosael · Accepted solution]

Yes, they are itemizing so 90% is going on Sch A

[TaxGuyBill]

Then as Lisa said, yes, that is allowed and has always been the case.

[rosael]

Thanks for taking the time to reply.

[rosael]

Thank you for taking the time to respond. It's much appreciated.

[rbynaker]

If they're hitting the SALT cap there's a wonky calculation that has to be made for the 8829.  This year I had my first one of these that actually mattered.

[rosael]

Really? What is that? They are hitting the SALT cap. With so many of my clients being in high tax states, this is bound to happen again.

[sjrcpa]

See Form 8829 and the instructions.

[rbynaker]

See the "Line 11 worksheet" on page 4:

https://www.irs.gov/pub/irs-pdf/i8829.pdf

[rosael]

Thanks for your response. I had already taken this into account. I thought there was something else I may have been missing. Lisa is correct. It's been a long season. 

[rbynaker]

Circling back to your original question/title . . . Unless the clients are just barely hitting the SALT cap then the property taxes should be down on the "excess" line 17 where they are not allowed to increase the Sch C loss.