Client is selling house with in home office

My client plans to sell their home this year and they have reported 8.06% of the house as an in home office and not taken the safe harbor in 2019 or 2020, which are the two prior years they have lived there. On the work sheet for the sale of their home, in reference to the home office deduction it asks if they have taken a deduction for the office in two of the last five years, then what is that percentage.

My question is whether or not we can take the safe harbor in this year (2021) and leave that unanswered, which doesn't calculate a capital gain for the in home office. If the percentage is entered, there is a $25,000 capital gain.

Not sure about the significance of that question in your software but gain to the extent of prior depreciation is taxable upon the sale of the house.

Paula, You are confusing separate structure rules with in-home business use rules. You only recover/recapture/unrecapture the depreciation.

Thanks. I think I need to do something different in the software. "...gain to the extent of prior depreciation is taxable upon the sale". Prior depreciation is only $1500, and if we don't do the safe harbor, it will only be about $2250.

Fixed it. The gain is only equal to the recaptured depreciation. Thanks.

See post #9 in this discussion. I think it is on point. If the office was in the home and not a separate structure I believe you pay tax on the depreciation but the entire gain is eligible for section 121 exclusion.

viewtopic.php?f=8&t=22900&p=195510&hilit=attorney#p195510

Oops I see that others have answered already. Opened it earlier today and just got back to it