Example 1.

Finley files a federal income tax return on a calendar year basis. On July 20, Finley began using 400 square feet of the home for a qualified business use. Finley continued to use the 400 square feet until the end of the year. Finley’s average monthly allowable square footage is 125 square feet (300 square feet for August through December divided by the number of months in the year ((300 + 300 + 300 + 300 + 300)/12)).