Can an RV Qualify as a Home Office?

Watch out for claiming the home office deduction with small living spaces.

By , J.D. · USC Gould School of Law

One of the best tax deductions if you run a business out of your home is the home office deduction. It allows you to deduct a portion of your rent or home mortgage expense, plus utilities, if you use a part of your home as a business office.

However, your business must earn a profit to actually take the deduction.

What Is a "Home" for Purposes of the Home Office Deduction?

What constitutes a "home" for purposes of the home office deduction is broadly construed. It includes a regular house, apartment, condominium, or mobile home, or even a boat in which you live. But what about an RV (recreational vehicle)?

The two main IRS rules for deducting home office expenses are:

  • the space must be regularly used as a home office (it is your principal place of business) and
  • it must be exclusively your home office—you can't use the area for anything else.

Can You Take a Home Office Deduction for an Office in an RV?

In a case that ended up in tax court, the court said no. The case involved a couple who paid $283,494 for an RV back in 2002. The RV was relatively large: It had a sleeping area, a bathroom, and a kitchenette with a countertop. Across the vehicle from the kitchen counter was a second countertop that the husband used as a desk and on which he had a computer and office supplies.

The couple operated a consulting business together. They had a home in Illinois but spent half of 2005 and all of 2006 traveling in their RV. They worked at their business while they traveled. They claimed a home office deduction of almost $6,000 for 2005 and over $9,000 for 2006. The IRS denied both deductions, and the tax court agreed.

Use Must Be Regular and Exclusive

To qualify for a home office deduction, a business owner must use a portion of a dwelling unit regularly and exclusively for business purposes. The tax court found that this couple had failed to prove that there was an identifiable portion of their RV that was used exclusively for business purposes.

The area they claimed constituted the home office was the countertop that the husband used as a desk. But the court said it was simply not believable that "in the cramped quarters of a motor home, an unclosed area like the countertop would somehow be exclusively reserved to business activity." (Dunford v. Comm'r, T.C. Memo 2013-189).

The Exclusive Use Test Is Difficult to Meet When It Comes to Small Living Quarters

This was not the first time a taxpayer with a small living space was denied a home office deduction. A psychologist who lived in San Francisco claimed a home office deduction for one-quarter of her apartment. However, the entire apartment was a 400-square-foot studio consisting of an open area (approximately 13 feet by 15 feet) furnished with a desk and a couch and a small dining area and kitchen (each approximately 7 feet by 8 feet).

Given the layout of this tiny apartment, the court wouldn't buy the taxpayer's claim that she used 100 square feet exclusively for business. (Mullin v. Comm'r, TC Memo 2001-121).

Talk to a Tax Pro

In theory, you might be able to take the home office deduction for an RV if you can meet both the regular use and exclusivity tests (and otherwise qualify), which is tough to do when dealing with the limited available space in an RV. While you might use a specific area of your RV as your primary office, you probably don't use it exclusively, especially if you also also live in it. For guidance on this and other tax matters, talk to a tax professional, such as a certified public accountant or a tax attorney.

For more information on deductions and other tax issues for small businesses, get Deduct It! Lower Your Small Business Taxes, by Stephen Fishman (Nolo).

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