Nicolette is a self-employed consultant who uses 25% of her residence as an office. The office is used exclusively for business and is frequented by customers on a regular basis. Nicolette also uses her den as an office (10% of the total floor space of her home) to prepare bills and keep records. However, the den is also used by her children as a TV room. In 2022, Nicolette's net income from the consulting business (other than her home office expenses) amounts to $110,000 in 2022. She also incurs $900 of expenses directly related to the office (e.g., painting of the office, window blinds). Nicolette incurs the following expenses in 2022 related to her residence View the expenses. Read the requirements. Mortgage interest and real estate taxes Other home office expenses Total expense for office in home Requirement b. Would your answer to Part a change if Nicolette's net income from consulting were only $5,475 for the year? (Nicolette is electing to use the "actual expenses" rather than the "safe harbor" method.) Yes. The answer to Requirement a would change if Nicolette's income were only $5,475 for the year Under this revised fact pattern Nicolette can deduct the following List the deductible expenses in the correct order using the rules of Reg. Sec. 1280A-3 2 3 Depreciation expense SLLL Total expense for office in home 6,075 Amount of Deduction
Nicolette is a self-employed consultant who uses 25% of her residence as an office. The office is used exclusively for business and is frequented by customers on a regular basis. Nicolette also uses her den as an office (10% of the total floor space of her home) to prepare bills and keep records. However, the den is also used by her children as a TV room. In 2022, Nicolette's net income from the consulting business (other than her home office expenses) amounts to $110,000 in 2022. She also incurs $900 of expenses directly related to the office (e.g., painting of the office, window blinds). Nicolette incurs the following expenses in 2022 related to her residence View the expenses. Read the requirements. Mortgage interest and real estate taxes Other home office expenses Total expense for office in home Requirement b. Would your answer to Part a change if Nicolette's net income from consulting were only $5,475 for the year? (Nicolette is electing to use the "actual expenses" rather than the "safe harbor" method.) Yes. The answer to Requirement a would change if Nicolette's income were only $5,475 for the year Under this revised fact pattern Nicolette can deduct the following List the deductible expenses in the correct order using the rules of Reg. Sec. 1280A-3 2 3 Depreciation expense SLLL Total expense for office in home 6,075 Amount of Deduction
Chapter6: Business Expenses
Section: Chapter Questions
Problem 33P
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N 1
Transcribed Image Text:Nicolette is a self-employed consultant who uses 25% of her residence as an office. The office is used exclusively
for business and is frequented by customers on a regular basis. Nicolette also uses her den as an office (10% of the
total floor space of her home) to prepare bills and keep records. However, the den is also used by her children as a
TV room. In 2022, Nicolette's net income from the consulting business (other than her home office expenses)
amounts to $110,000 in 2022. She also incurs $900 of expenses directly related to the office (e.g., painting of the
office, window blinds). Nicolette incurs the following expenses in 2022 related to her residence
View the expenses.
Read the requirements.
2
Total expense for office in home
Requirement b. Would your answer to Part a change if Nicolette's net income from consulting were only $5,475 for
the year? (Nicolette is electing to use the "actual expenses" rather than the "safe harbor" method.)
Yes. The answer to Requirement a would change
if Nicolette's income were only $5,475 for the year
Under this revised fact pattern Nicolette can deduct the following List the deductible expenses in the correct order
using the rules of Reg Sec. 1280A-3
3
Mortgage interest and real estate taxes
Other home office expenses
Depreciation expense
6LLL
Total expense for office in home
6,075
Amount of
Deduction
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