Question

Is $50k to convert a bedroom into a home office (recessed wall to storage closet, doorway, recessed lights) an asset or expense? Does not logically increase home value.

Forum|Forum|1 year ago
March 13, 2025
1 reply
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I paid a contractor $50k to convert a bedroom in my home into my home office. Scope included converting a recess in the wall into a closet, a new door to the backyard for clients, recessed lights, etc. Should I record this cost as an asset or expense? It's more like repairs/maintenence than it is a building improvement (at least per my city's property tax guidelines). Wouldn't it be odd to record this as a business asset but not an improvement to the book value of my home asset in city records, being the same property?

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govnarAuthor

I see an expense category "repairs and maintenance" but turbotax says "this only applies to separate office or other business property" (ie not home office?)

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RobertB4444

You had it right the first time. It's going to be an asset. A $50K asset called "Home Office Renovation". No, it didn't add value to your property but it did cost you all that money and this is how you deduct it.

@govnarayan

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govnarAuthor

Thanks @RobertB4444! Do you know how to add a 'home office improvement' asset to turbotax? There are 4 choices to descrive the asset - computer/video/photo/telephone equipment, tools/machinery/equipment/furniture, real estate property, and intangibles/other property. The 'real estate property' option seems to apply only to commercial buildings (vs my home office, which is a room in my home). The 'other property' options asks me to input an asset class for depreciation but I can't see see residential home improvements in the examples. Have a similar question for assets that affect the whole house eg new roof (of which a % I think can be attributed to the business).