Home Office Deduction: Real estate taxes and mortgage interest creating a loss?

IRS Publication 587, on Business Use of your Home, says this:

"If you cannot deduct the business portion of your home mortgage interest in full this year, you will carry over the remaining home mortgage interest to a subsequent year in which you use actual expenses to figure your business of the home deduction."   and

"If you cannot deduct the business portion of your real estate taxes in full this year, you will carry over those real estate taxes to a subsequent year in which you use actual expenses to figure your business of the home deduction."

If you can, in fact, deduct these items even in a year with no business income, why would the IRS talk about carrying them forward?

Thank you!

@TaxMonkey and @abctax55 know that it depends on whether the taxpayer is itemizing or claiming the standard deduction.  Read all of Pub 587:

Certain expenses are deductible to the extent they would have been deductible as an itemized deduction on your Schedule A or, if claiming the standard deduction, would have increased your standard deduction had you not used your home for business. If the expense is indirect, use the business percentage of these expenses to figure how much to include in your total business-use-of-the-home deduction. If you are itemizing your deductions on Schedule A (Form 1040), these expenses include the following.
• Real estate taxes.
• Home mortgage interest.
• Casualty losses attributable to a federally declared
disaster.
If you are claiming the standard deduction, these expenses only include net qualified disaster losses that increase your standard deduction.

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@hcliston wrote:

 

You both said that Real estate taxes and mortgage interest are allowed to create a deductible loss.

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In some cases yes.  But due to court case a few years, ago, the rules changed a bit depending on if a taxpayer itemizes or not, and if the SALT limit applies.

One of your later comments seems to indicate that your client is subject to the SALT limits,  If I remember correctly, that essentially means the interest and taxes on your 8829 are less likely to create an allowable loss.

Read the Instructions for Form 8829.  Some of the expenses may go on lines 10 and 11 (which can create an allowable loss), but other expense go on lines 16 and 17 (which can NOT create an allowable loss).

https://www.irs.gov/instructions/i8829