I don't see it this way. The property is owned by you the individual and not by the business (single family dwelling). There is only one house title, not one for the house and one for the house office. The house owner is also the sole proprietar of the business who claims the deduction according to IRS Code. However there is only one sale and one property sold (your house), not two. The essence of the deduction is that you are depreciating part of your home (like a business is able to depreciate its assets). The basis of the house is adjusted down for the depreciation taken. If your home were a normal asset you would then pay tax on gains based on the sales price - asset basis. However the special rules applicable to primary residences owned for 2 years or more eliminate the tax.