Tax: Another T/S vs Business % Question

[legomom922]

So as I had said another post, I redorated my stepkids bedroom because they are here in there 4 nights a month, and my DCK use it a hek of alot more...so since I redorated it in a Baby Snoopy theme, teenage stepkids are getting NO benefit out of a baby snoopy border & curtains..

Now if I write off the border as a T/S expense, the formula I use from MMK, says out of a $37 border, only $4 is deductable??? This does not seem right!!

Now since this is in the stepkids Br that the DCK's use, should I be using the business % instead and using like maybe 80% business or something?

It really just doesnt seem right that something that I purchased for DCK's "nap" room, I should have so little to write off only because stepkids sleep in there 4 nights a month!!

[Jewels]

I think since you decorated it in such an infantile theme, That you could write it off 100% business because the other kids are teenagers, Just like most toys you buy have to be time/space if you have children that play with them, but if buy a toy for 3 year olds, and you have 12 year olds at home of your own, you can write the 3 year old toy off 100%, because its more likely you bought it strictly for daycare, because you wouldnt by that for your child....now I have a 1 year old, and a three year old, So if I did the same thing, It would have to be time space, but I think an auditor would know that you wouldnt buy snoopy for the teenagers. Anyways, this is what I took from a seminar I had with Tom.......you have to look at things like, "I bought a bean bag for daycare only...........an auditor would say, so your telling me that your 6 year old, Never uses that bean bag, when other children aren't around, They will find that very hard to believe.

[legomom922]

Oh I SO wish I could have a seminar with Tom! I have ordered a couple of his books, buut that havent arrived yet. i'm hoping after I read those, I will me more educated on these things!

He had said to me in anotehr thread, it's not "why" you bought an item, it's "how" you use it that makes the difference. So if you bought a bean bag chair and it sits in a room that is used for exclusively for daycare, then that bean bag chair would be a 100% business expense. Butu if it is in your living room, but you bought it only for daycare, but your kids use it too, then it would be time/ space.

Some things though I am really confused on! Now I think that with the redecoration of the room it would be 100% but if it is in a room that other kids have acess too, then maybe it wouldnt. I hope Tom can chime in here and help me out!

[kendallina]

Thanks legomom for asking all of these taxes questions. I am very new to all of this, so I've been stalking these threads!

[Jewels]

However, a room strictly used only daycare hours..........if you have little children of your own, and you have a daycare room, filled with toys, unless it is completly seperated from your house, you would be argued with that your children never ever go in that room outside of daycare. While I have a big room, that is my daycare room, Its a room i tore apart and put together, strictly for daycare, but my kids still wonder in there after daycare, So anything I put in there pretty much is time/space

[legomom922]

Thats true, but how could the IRS ever believe you have any 100% room or item then? They have to "trust" you to some degree, don't they? Otherwise, they could pick apart anything we ever buy! They could be like "well how do we know you really used it for business?" KWIM?


Do you or anyone else here, know the rules or the definition to time/space vs actual business use %??? I get stuck on tis one alot!

I mean some thing I clearly understand what time/space really means: Correct me if I'm wrong, LOL but that would mean something in your home that was used only by DCK's while you are open. Like the electric bill, water bill, toys played with that belong to your children, pnp that is used by your baby, etc. But what is the rule for the business use %?

[legomom922]

Thanks legomom for asking all of these taxes questions. I am very new to all of this, so I've been stalking these threads!

If you think of some, add them to the list!

[legomom922]

any other opinions on this one?

[legomom922]

Tom, can you help?

[kendallina]

If you think of some, add them to the list!

I don't even know enough yet to have questions ::.

[TomCopeland]

How much is deductible?

I'm a little behind in responding to questions here because I started a new blog (www.tomcopelandblog.com).

You said you did some redecorating in your step children's bedroom that is used by your day care children. It doesn't matter that the redecorating was for infants - the older step children still used the room and still got the benefit of the redecorating. Since it will continue to be used personally by your step children you can't deduct 100% of the cost of the redecorating. When you try to claim something as 100% business use you have to be able to say that you never, ever, use it for personal purposes. Using it 2% for personal purposes is still not 100% business use.

When an expense is used for both business and personal purposes you have two options on how to determine the amount you can deduct for your business. First, use your Time-Space percentage. Second, use an actual business use percentage.

If you want to use an actual business use percentage you will need to keep records to show how you calculated the actual business use of an item. In this case, you could track how many days the day care children are in the room and how many days your step children are in the room. Do this over at least a 2 month period. If you feel that these 2 months are typical of the rest of the year, use the percentage of business use for those two months for the entire year.

Here's an example of how a business use percentage could be calculated. Over a two month period you kept a record showing that the day care children were in the room every day, or for 40 days (5 days a week x 8 weeks). The step children were in the room 4 nights a month x 2 months = 8 times in 2 months. Total use of the room 48 days. Business use is 40 days divided by 48 days or 83.3%. Thus you could deduct 83.3% of the cost of the redecorating as a business expense.

[legomom922]

This makes sense, Thanks for clarifying that sooo well!