Cindy, who is self-employed, maintains an office in her home that comprises 20% (390 square feet) of total floor space. Gross income for her business is $47,900, and her residence expenses are as follows: Real property taxes $4,380 Interest on mortgage 7,300 Operating expenses 3,650 Depreciation (based on 20% business use) 6,635 If required, round your final answer to the nearest dollar. a. What is Cindy's office in the home deduction based on the regular method? 9,701 V Feedback V Check My Work Employees and self-employed individuals are not allowed a deduction for office in the home expenses unless a portion of the r used exclusively on a regular basis under certain circumstances. b. What is Cindy's office in the home deduction based on the simplified method? %$4 1,950 X
Cindy, who is self-employed, maintains an office in her home that comprises 20% (390 square feet) of total floor space. Gross income for her business is $47,900, and her residence expenses are as follows: Real property taxes $4,380 Interest on mortgage 7,300 Operating expenses 3,650 Depreciation (based on 20% business use) 6,635 If required, round your final answer to the nearest dollar. a. What is Cindy's office in the home deduction based on the regular method? 9,701 V Feedback V Check My Work Employees and self-employed individuals are not allowed a deduction for office in the home expenses unless a portion of the r used exclusively on a regular basis under certain circumstances. b. What is Cindy's office in the home deduction based on the simplified method? %$4 1,950 X
Chapter1: Federal Income Taxation—an Overview
Section: Chapter Questions
Problem 52P
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