When taxpayers use their residences to conduct business or store business inventory, they may qualify for home office tax deductions, under certain conditions. The owner of a smog inspection business was required to maintain records for 3 years. He used his nearby personal garage to store the records and extra smog equipment and claimed tax deductions for the space. The IRS denied the claim and the U.S. Tax Court agreed. The reason: The garage wasn’t the taxpayer’s principal place of business and he wasn’t storing inventory or product samples. (TC Memo 2018-103)

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