What is an Exclusive use test?

An exclusive use test is an IRS requirement stipulating that a designated home office space must be used solely and exclusively for business purposes to qualify for the home office deduction. The test requires that the workspace cannot serve dual purposes as both a business and personal area, meaning even occasional personal use, such as storing personal items or using the space for family activities, can disqualify the entire deduction. This strict standard applies to the specific portion of the home claimed as a business workspace, requiring clear physical and functional boundaries between business and personal areas. Businesses can maximize deductions through a proper Home office setup while maintaining compliance with exclusive use requirements throughout the tax year.

Related Terms

What are Home Office Expenses?

What is a Tax deduction?

What is a Business use percentage?

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