S 3371
110th CONGRESS
2d Session
S. 3371
To amend the Internal Revenue Code of 1986 to simplify the
deduction for use of a portion of a residence as a home office by providing
an optional standard home office deduction.
IN THE SENATE OF THE UNITED STATES
July 31, 2008
Ms. SNOWE (for herself and Mr. CONRAD) introduced the following bill;
which was read twice and referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to simplify the
deduction for use of a portion of a residence as a home office by providing
an optional standard home office deduction.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Home Office Tax Deduction Simplification
and Improvement Act of 2008'.
SEC. 2. OPTIONAL STANDARD HOME OFFICE DEDUCTION.
(a) In General- Subsection (c) of section 280A of the Internal Revenue
Code of 1986 (relating to exceptions for certain business or rental
use; limitation on deductions for such use) is amended by adding at
the end the following new paragraph:
`(7) ELECTION OF STANDARD HOME OFFICE DEDUCTION-
`(A) IN GENERAL- In the case of an individual who is allowed a deduction
for the use of a portion of a dwelling unit as a business by reason
of paragraph (1), (2), or (4), notwithstanding the limitations of
paragraph (5), if such individual elects the application of this
paragraph for the taxable year with respect to such dwelling unit,
such individual shall be allowed a deduction equal to the standard
home office deduction for the taxable year in lieu of the deductions
otherwise allowable under this chapter for such taxable year by
reason of paragraph (1), (2), or (4).
`(B) STANDARD HOME OFFICE DEDUCTION-
`(i) IN GENERAL- For purposes of this paragraph, the standard
home office deduction is an amount equal to the product of--
`(I) the applicable home office standard rate, and
`(II) the square footage of the portion of the dwelling unit
to which paragraph (1), (2), or (4) applies.
`(ii) APPLICABLE HOME OFFICE STANDARD RATE- For purposes of this
subparagraph, the term `applicable home office standard rate'
means the rate applicable to the taxpayer's category of business,
as determined and published by the Secretary for the 3 categories
of businesses described in paragraphs (1), (2), and (4) for the
taxable year.
`(iii) MAXIMUM SQUARE FOOTAGE TAKEN INTO ACCOUNT- The Secretary
shall determine and publish annually the maximum square footage
that may be taken into account under clause (i)(II) for each of
the 3 categories of businesses described in paragraphs (1), (2),
and (4) for the taxable year.
`(i) GENERAL RULE- Except as provided in clause (ii), any election
under this paragraph, once made by the taxpayer with respect to
any dwelling unit, shall continue to apply with respect to such
dwelling unit for each succeeding taxable year.
`(ii) ONE-TIME ELECTION PER DWELLING UNIT- A taxpayer who elects
the application of this paragraph in a taxable year with respect
to any dwelling unit may revoke such application in a subsequent
taxable year. After so revoking, the taxpayer may not elect the
application of this paragraph with respect to such dwelling unit
in any subsequent taxable year.
`(D) DENIAL OF DOUBLE BENEFIT-
`(i) IN GENERAL- Except as provided in clause (ii), in the case
of a taxpayer who elects the application of this paragraph for
the taxable year, no other deduction or credit shall be allowed
under this subtitle for such taxable year for any amount attributable
to the portion of a dwelling unit taken into account under this
paragraph.
`(ii) EXCEPTION FOR DISASTER LOSSES- A taxpayer who elects the
application of this paragraph in any taxable year may take into
account any disaster loss described in section 165(i) as a loss
under section 165 for the applicable taxable year, in addition
to the standard home office deduction under this paragraph for
such taxable year.
`(E) REGULATIONS- The Secretary shall prescribe such regulations
as may be necessary to carry out the purposes of this paragraph.'.
(b) Modification of Home Office Business Use Rules-
(1) PLACE OF MEETING- Subparagraph (B) of section 280A(c)(1) of the
Internal Revenue Code of 1986 is amended to read as follows:
`(B) as a place of business which is used by the taxpayer in meeting
or dealing with patients, clients, or customers in the normal course
of the taxpayer's trade or business, or'.
(2) DE MINIMIS PERSONAL USE- Paragraph (1) of section 280A(c) of such
Code is amended by striking `for the convenience of his employer'
and inserting `for the convenience of such employee's employer. A
portion of a dwelling unit shall not fail to be deemed as exclusively
used for business for purposes of this paragraph solely because a
de minimis amount of non-business activity may be carried out in such
portion'.
(c) Reporting of Expenses Relating to Home Office Deduction- Within
60 days after the date of the enactment of this Act, the Secretary of
the Treasury shall ensure that all forms and schedules used to calculate
or report itemized deductions and profits or losses from business or
farming state separately amounts attributable to real estate taxes,
mortgage interest, and depreciation for purposes of the deductions allowable
under paragraphs (1), (2), (4), and (7) of section 280A(c) of the Internal
Revenue Code of 1986.
(d) Effective Date- The amendments made by this section shall apply
to taxable years beginning after December 31, 2008.
END
