Balancing costs - South Florida Business Journal:

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One of those avenues is the live/work spacer option, a trend that is growing in San Some of those business owners say that living and working in the same dwelling does save expensesw andcommuting costs. Several projects have made theie way to the Alamo City to meetthe demand, includinb the Steel House Lofts in the historixc Peden Iron & Steel Building downtown, and live/work space at Pearo Brewery. Will Holshouser, an associate with San Antonio-basedd , says the live/worj space seems to mesh better in the downtowj areas of larger cities and areparticularl well-suited to certain industries, including certified publi c accountants, attorneys, architects and artists.
Chip a local architect, says the live/worm space concept was the perfect option for he and his wife sincew they have onlyone vehicle. Late last year, Hendersobn moved his home and his Contects Consultantsand Architects, into a unit at the newly completeed Pearl Brewery located at 306 E. Grayson. “j knew I wanted to be in this spac threeyears ago,” Henderson says. “The mixed-use look was I don’t have to leave every morning to go to Johnny Hernandez, owner of True Flavors, recently move into the Steel House He says the move has given him the conveniencd of living and working in downtown San for a reasonable cost.
True Flavors is a San Antonio-based catering company owned by Hernandez and his sisteerLeticia Hernandez. “A lot of my businessd happens downtown and a lot of my social circle are downtown so Ilove it,” he says. Hernandez says he actually has two units at SteelHouses Lofts, located at 1401 South Flores St., one for his business officde and the other as his personal residence. Henderson, meanwhils says combining his work and home has reduced his expensew in several areasincluding utilities, rent and But while the live/work space option does offer many financial advantage s to small-business owners, it can also create a few challengew to those owners looking for certaibn tax breaks, such as the home-office deduction, local tax experts say.
Live/worm spaces can make sense andsave money, but meetingh the requirements to write some of thos expenses off can be a bit says Jim McCutcheon, senior counsel with LLP. Accordin g to the (IRS), taxpayers who use a portiom of their home for businesss purposes may be able to take a home officee deduction if they meetcertain requirements. Expenses that may be deductedx include the business portion of realestatr taxes, mortgage interest, rent, insurance, painting, repairs and depreciation. “There are lots of people who wouldqualifyu (for the deduction), but don’t out of fear (of beinfg audited).
Then, there are those that don’ty qualify and take the deductioj anyway,” McCutcheon says. “It is a crazy In trying to qualify for the some of the problem occur because the owner may have a home office that they work out ofpart time, yet have an officr elsewhere. Or, they try to claimm a home office deduction for an area where both work dutie and personal timeare spent. For McCutcheon says, a dining room table that is used for familty meals and as a desk would likelyh be questioned byIRS officials.
McCutcheonn explains that some of thenew live/work spaceds might be questioned by the IRS in regardse to the home-office deduction since the spacesx are often lofts and thers are no walls to distinguish the two areas. He adds that with only one it can be difficult to prove the space is strictlytfor business. “It is toughg to show the space is used exclusivel y for business when there is no wallor door,” he “Otherwise, what is personal and what is businesxs tends to blend.
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