http://www.journalofaccountancy.com/Iss ... ctions.htm
EXCLUSIVE AND REGULAR USE
To meet the exclusive use test, a taxpayer must have a specific part of the home—though not necessarily a complete room—set aside and used regularly and exclusively for business purposes. The area is not limited to a single room; multiple rooms may qualify. If the taxpayer uses an area of the home for both business and personal use, no deduction is allowed.
In Weightman , TC Memo 1981-301, the IRS disallowed a home office deduction for a taxpayer who used part of his bedroom as a home office. Although the amount was disallowed based on the exclusive rule, the Tax Court found that nothing in the law supported the idea that a home office must be an entire room or be physically separate from the remainder of the house.
The Tax Court confirmed that finding in Huang , TC Summary Opinion 2002-93, allowing the taxpayer a deduction for 75% of a room that was used exclusively for business, even though the entire room was not used for business purposes.
In Hughes , TC Memo 1981-140, the Tax Court ruled a home office could be located in what may be considered an unconventional place—a large walk-in closet—if all the rules were met for the space.
If the home office occupies only an area of the home, it’s important to segregate all personal activities from it. All the furniture and equipment must be confined to the specific home office area, not interspersed among personal items.
