IRS offers further guidance on home office deductions. (Internal Revenue Service)

National Underwriter Life & Health-Financial Services Edition, May, 1994 by Baker, Scott W.

Internal Revenue Service (IRS) regulations on tax deductions for home offices have been further clarified in Revenue Ruling 94-24. The ruling holds that the IRS will use two tests to determine whether a home office is the principal place where a taxpayer conducts business and thus is entitled to a tax deduction. The tests are the relative importance of the business activities conducted at a home-based office and at the office of their employer, and the amount of time spent at each location on business activities.

The Internal Revenue Service has recently issued Revenue Ruling 94-24 explaining how the Service will apply the "relative importance" and "time" tests set forth in last year's U.S. Supreme Court decision Commissioner v. Soliman. These two tests are used in...

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