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system
how to determine how much to charge your business for rent (in your house)?
user
your best approach is to assess rent levels in your local area for offices of a similar size. you need to take into account all the usuals - amenities, parking, etc, just as if your home-office was provided by a third-party. get your $/sq ft and work out the monthly amount. with this figure, you need to then work out what % of it you can charge. if the space is used exclusively for the business, charge 100%. if it's used about half the time, charge 50%, etc. i would strongly advise you to do two things - 1. make sure your accountant and your attorney help you get this squared away. 2. document everything about how you arrived at the cost. nothing fancy, but dates, realtors, addresses, $/sq foot. a simple table will do. by doing these two things, if the irs should come around to chat, you should be covered.
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