How to fill out form 8829 line 8 when home office was used exclusively for 1/3 year and rented office was used exclusively for other 2/3 year?

I have been claiming a home office for years, but 1/3 way through 2007 we moved into a house without enough space, so now I rent an office outside the home. I want to put on form 8829 line 8 the gross receipts for that 1/3 year less only those expenses for that 1/3 year, but the worksheet in TurboTax is makingiving me an error if I don't put in ALL the expenses for the year. Is it OK to override line 8 to do what I am suggesting?

(Asked 02/25/08, Views 83)

No, you should not override line 8. TurboTax is computing line 8 correctly.

The IRS instructions for line 8 state that when part of your income comes from somewhere other than your home office, you prorate your gross income only.

Then the IRS instructs you to subtract the total expenses from Schedule C, line 28 to determine the amount to enter on Form 8829, line 8.

The only expenses you should prorate are the home office expenses you enter on Form 8829 itself.

(Posted 02/26/08)