CengageNOWv2| Online teaching and learning resource from Cengage Leaming8/28/2019-1 home office deduction limitation: $--slified method: $8/28/2019CengageNOWv2| Online teaching and learning resource from Cengage Leaning50. PR.03-21Problem 3-21Office in the Home (LO 3.11)Cindy operates a computerized engineering drawing business from her home. Cindy maintains a home office andproperly allocates the following expenses to her office:Depreciation$1,500Utilities500Real estate taxes325500Mortgage interest (100 percent deductible)a. Assume that Cindy earns income of $4,400 from her business for the year before deducting home office expenses.She has no other expenses associated with the business.Calculate Cindy's deduction for home office expenses.$b. Assume that Cindy earns income of $2,600 from her business during the year before deducting home officeexpenses.Calculate Cindy's deduction for home office expenses.$

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Asked Sep 7, 2019
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Question #50

CengageNOWv2| Online teaching and learning resource from Cengage Leaming
8/28/2019
-1 home office deduction limitation: $
--slified method: $
8/28/2019
CengageNOWv2| Online teaching and learning resource from Cengage Leaning
50. PR.03-21
Problem 3-21
Office in the Home (LO 3.11)
Cindy operates a computerized engineering drawing business from her home. Cindy maintains a home office and
properly allocates the following expenses to her office:
Depreciation
$1,500
Utilities
500
Real estate taxes
325
500
Mortgage interest (100 percent deductible)
a. Assume that Cindy earns income of $4,400 from her business for the year before deducting home office expenses.
She has no other expenses associated with the business.
Calculate Cindy's deduction for home office expenses.
$
b. Assume that Cindy earns income of $2,600 from her business during the year before deducting home office
expenses.
Calculate Cindy's deduction for home office expenses.
$
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CengageNOWv2| Online teaching and learning resource from Cengage Leaming 8/28/2019 -1 home office deduction limitation: $ --slified method: $ 8/28/2019 CengageNOWv2| Online teaching and learning resource from Cengage Leaning 50. PR.03-21 Problem 3-21 Office in the Home (LO 3.11) Cindy operates a computerized engineering drawing business from her home. Cindy maintains a home office and properly allocates the following expenses to her office: Depreciation $1,500 Utilities 500 Real estate taxes 325 500 Mortgage interest (100 percent deductible) a. Assume that Cindy earns income of $4,400 from her business for the year before deducting home office expenses. She has no other expenses associated with the business. Calculate Cindy's deduction for home office expenses. $ b. Assume that Cindy earns income of $2,600 from her business during the year before deducting home office expenses. Calculate Cindy's deduction for home office expenses. $

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Expert Answer

Step 1

As Cindy is self employed and doing business from her home office, she is entitled to deduct home office expenses against the revenues earned.

Step 2

1 a.  The total of allocated home office expenses are $2825.( $1500+500...

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