Hey /biz/
My friend is an accountant at the engineering firm I work at. I was going to do some renovations on my house (mostly finishing my basement). He told me to start my own consulting company and turn my basement into an "office" and I all the money I put into renos will give me a major tax break.
Is this true? It seems almost too easy.
>>1958721
Yes this is true.
>>1958801
So that's it? I just dissolve my company after a couple years when my basement is finished?
>>1958882
It'd really be better if your "consulting firm" showed some income and/or employees.
>>1958882
Yep.
Once the basement is finished try calling your friend.
Dont call again if he doesn't pick up.
>>1958882
>I just dissolve my company after a couple years when my basement is finished?
If you do that then how are you going to expense your vehicle travel and supply purchases?
>>1958721
I'm pretty sure you'd need to meet at least a few requirements to do it and not get dicked by the IRS afterwards.
For a part of your home to qualify for business use, it has to be used exclusively and regularly for conducting business.
You also need to show some kind of profit otherwise the IRS will reclassify your business as a hobby, meaning no deductions.
If you manage to pass as a business though you can also deduct other things besides the cost of your renovations. Things like utilities, landscaping, snow removal.
The problem with your idea of dissolving your business after a few years is that leasehold improvements, your renovations, are depreciated over 15 years. So if you wanted the full benefit of the deduction you'd have to keep up your business for a decade and a half.