Chapter 08 Comprehensive Problem eBook Trish Himple owns a retail family clothing store. Her store is located at 4321 Heather Drive, Henderson, NV 89002. Her employer identification number is 95-1234321 and her Social Security number is 123-45-6789. Trish keeps her books on an accrual basis. The income and expenses for the year are: Gross sales $340,000 Returns and allowances 14,000 Expenses: Beginning inventory (at cost) $ 85,000 Add: purchases 101,000 Cost of goods available for sale $186,000 Less: ending inventory (at cost) 71,000 Cost of goods sold $115,000 Rent 24,400 Insurance 2,000 Legal and accounting fees 5,000 Payroll 56,400 Payroll taxes 4,400 2,200 Utilities 750 Office supplies 6,200 Advertising Trish's bookkeeper has provided the book-basis fixed asset roll forward to be used in computing the depreciation (see separate tab). For tax purposes, Trish elected out of bonus depreciation in all years except 2020. She did not elect immediate expensing in any year. The tax lives of the assets are the same as the book lives shown in the fixed asset schedule. The truck is not considered a passenger automobile for purposes of the luxury automobile limitations. Trish also has a qualified home office of 250 sq. ft. Her home is 2,000 sq. ft. Her 2015 purchase price and basis in the home, not including land, is $100,000 (the home's market value is $150,000). She incurred the following costs in 2020 related to the entire home: Chapter 08 Comprehensive Problem eBook Trish's bookkeeper has provided the book-basis fixed asset roll forward to be used in computing the depreciation (see separate tab). For tax purposes, Trish elected out of bonus depreciation in all years except 2020. She did not elect immediate expensing in any year. The tax lives of the assets are the same as the book lives shown in the fixed asset schedule. The truck is not considered a passenger automobile for purposes of the luxury automobile limitations. Trish also has a qualified home office of 250 sq. ft. Her home is 2,000 sq. ft. Her 2015 purchase price and basis in the home, not including land, is $100,000 (the home's market value is $150,000). She incurred the following costs in 2020 related to the entire home: Utilities $3,000 Cleaning 1.000 Insurance 1 100 Property taxes 2,000 Required: Complete Trish's Schedule a Form 8829, and Form 4562 (as necessary). Make realistic assumptions about any missing data. Enter all amounts as positive numbers. If an amount box does not require an entry or the answer is zero, enter "O". If required round any dollar amount to the nearest dollar. Schedule of Fixed Asset Rollforward Trish's bookkeeper has provided the following book-basis fixed asset rollforward: Trish's bookkeeper has provided the following book-basis fixed asset rollforward: Himple Retail Fixed Asset Rollforward 12/31/2020 (book basis) DEPR COST 2018 2019 2020 ACCUM NET BOOK ASSET IN SERVICE METHOD LIFE BASIS DEPR DEPR DEPR DEPR VALUE CASH REGISTER 12/15/2018 SL 5 9,900.00 165.00 1,980.00 1,980.00 4,125.00 5,775.00 2018 TOTAL ADDITIONS 9,900.00 165.00 1,980.00 1,980.00 4,125.00 5,775.00 RETAIL FIXTURES 9/12/2019 SL 7 4,750.00 226.19 678.57 904.76 3,845.24 FURNITURE 9/12/2019 SL 7 3,900.00 185.71 557.14 742.85 3,157.15 2019 TOTAL ADDITIONS 8,650.00 411.90 1,235.71 1,647.61 7,002.39 TOTAL 18,550.00 165.00 2,391.90 3,215.71 5,772.61 12,777.39 DELIVERY TRUCK 6/1/2020 SL 5 37,500.00 4,375.00 4,375.00 33,125.00 DESK AND CABINETRY 6/1/2020 SL 7 11,900.00 991.67 991.67 10,908.33 COMPUTER 6/1/2020 SL 5 2,800.00 326.67 326.67 2,473.33 2020 TOTAL ADDITIONS 52,200.00 5,693.34 5,693.34 46,506.66 TOTAL 70,750.00 165.00 2,391.90 8,909.05 11,465.95 59,284.05 I Did you make any payments in 2020 that would require you to file Form(s) 10992 See instructions Yes No J If "Yes," did you or will you file required Form(s) 1099? Yes No Part I Income 1 Gross receipts or sales. See instructions for line 1 and check the box if this income was reported to you on Form W-2 and the "Statutory employee" box on that form was checked 1 340,000 2 Returns and allowances 2 14,000 3 Subtract line 2 from line 1 3 326,000 4 Cost of goods sold (from line 42) 4 115,000 5 Gross profit. Subtract line 4 from line 3 5 211,000 6 Other income, including federal and state gasoline or fuel tax credit or refund (see instructions) 6 7 Gross income. Add lines 5 and 6 7 211,000 Part II Expenses. Enter expenses for business use of your home only on line 30. 8 6,200 8 Advertising 18 18 750 Office expense (see instructions) Pension and profit-sharing plans. 9 Car and truck expenses (see 19 19 instructions).. 20 Rent or lease (see instructions): 9 10 10 Commissions and fees 20a a Vehicles, machinery, and equipment 11 Contract labor (see instructions) 11 b Other business property 20b 24,400 12 Depletion. 12 21 Repairs and maintenance 21 13 Depreciation and section 179 22 Supplies (not included in Part III) .. 22 23 23 expense deduction (not included Taxes and licenses 4,400 in Part III) (see instructions) 13 24 Travel and meals: 24a 14 Employee benefit programs a Travel 24a (other than on line 19). .... 14 b Deductible meals (see TE Inrunnen enthor than hooith! 15 2nnn inertian 24h Chapter 08 Comprehensive Problem eBook in Part III) (see instructions) 13 24 Travel and meals: 14 Employee benefit programs a Travel 24a (other than on line 19)..... 14 b Deductible meals (see 15 Insurance (other than health) 15 2,000 instructions) 24b 16 Interest (see instructions): 25 Utilities 25 2,200 a Mortgage (paid to banks, etc.) 16a 26 Wages (less employment credits) 26 56,400 b Other. 16b 27a Other expenses (from line 48) 27a 17 Legal and professional services 17 5,000 b Reserved for future use 27b 28 Total expenses before expenses for business use of home. Add lines 8 through 27a. 28 29 Tentative profit or (loss). Subtract line 28 from line 7 29 30 Expenses for business use of your home. Do not report these expenses elsewhere. Attach Form 8829 unless using the simplified method. See instructions. Simplified method filers only: Enter the total square footage of (a) your home: and (b) the part of your home used for business: Use the Simplified Method Worksheet in the instructions to figure the amount to enter on line 30 30 31 Net profit or (loss). Subtract line 30 from line 29. If a profit, enter on both Schedule 1 (Form 1040), line 3, and on Schedule SE, line 2. (If you checked the box on line 1, see instructions). Estates and trusts, enter on Form 1041, line 3. } 31 If a loss, you must go to line 32. 32 If you have a loss, check the box that describes your investment in this activity. See instructions. 32a All investment is at If you checked 32a, enter the loss on both Schedule 1 (Form 1040), line 3, and on Schedule SE, line 2. (If you checked the box on line 1, see the line 31 instructions). Estates and trusts, enter on Form 1041, line 3. If you checked 32b, you must attach Form 6198. Your loss may be limited. } risk. 32bSome investment is not at risk. For Paperwork Reduction Act Notice, see the separate instructions. Cat. No. 11334P Schedule C (Form 1040) 2020 Part III Cost of Goods Sold (see instructions) 33 Method(s) used to value closing inventory: a ? Cost b Lower of cost or market COther (attach explanation) 34 Was there any change in determining quantities, costs, or valuations between opening and closing inventory? If "Yes," attach explanation Yes No 35 Inventory at beginning of year. If different from last year's closing inventory, attach explanation 35 85,000 36 Purchases less cost of items withdrawn for personal use 36 101,000 37 Cost of labor. Do not include any amounts paid to yourself. 37 38 Materials and supplies 38 39 Other costs 39 40 Add lines 35 through 39 40 186,000 41 Inventory at end of year 41 71,000 42 Cost of goods sold. Subtract line 41 from line 40. Enter the result here and on line 4 42 115,000 Part IV Information on Your Vehicle. Complete this part only if you are claiming car or truck expenses on line 9 and are not required to file Form 4562 for this business. See the instructions for line 13 to find out if you must file Form 4562. 43 When did you place your vehicle in service for business purposes? (month/day/year) 44 Of the total number of miles you drove your vehicle during 2020, enter the number of miles you used your vehicle for: a c Other Business b c muting (see instructions) Was your vehicle available for personal use during off-duty hours? 45 Yes No 46 Do you (or your spouse) have another vehicle available for personal use? Yes No Yes No 47a Do you have evidence to support your deduction? b If "Yes," is the evidence written? Yes No Part V Other Expenses. List below business expenses not included on lines 8-26 or line 30. Chapter 08 Comprehensive Problem eBook Note: Don't use Part II or Part III below for listed property. Instead, use Part V. Part II Special Depreciation Allowance and Other Depreciation (Don't include listed property. See instructions.) 14 Special depreciation allowance for qualified property (other than listed property) placed in service during the tax year. See instructions. 14 15 Property subject to section 168()(1) election 15 16 Other depreciation (including ACRS). 16 Part III MACRS Depreciation (Don't include listed property. See instructions.) Section A 17 MACRS deductions for assets placed in service in tax years beginning before 2020 17 18 If you are electing to group any assets placed in service during the tax year into one or more general asset accounts, check here Section B-Assets Placed in Service During 2020 Tax Year Using the General Depreciation System (b) Month and (c) Basis for depreciation (a) Classification of (d) Recovery (g) Depreciation year placed in (business/investment use (e) Convention (f) Method property period deduction service only-see instructions) 19a 3-year property b 5-year property 0.7-year property d 10-year property e 15-year property f 20-year property 25 yrs. S/L g 25-year property 27.5 yrs. MM S/L h Residential rental property 27.5 yrs. MM S/L 39 yrs. MM S/L i Nonresidential real Chapter 08 Comprehensive Problem eBook d 10-year property e 15-year property f 20-year property g 25-year property 25 yrs. S/L 27.5 yrs. MM S/L h Residential rental property 27.5 yrs. MM S/L i Nonresidential real 39 yrs. MM S/L property MM S/L Section C-Assets Placed in Service During 2020 Tax Year Using the Alternative Depreciation System 20a Class life S/L b 12-year 12 yrs. S/L c 30-year 30 yrs. MM S/L d 40-year 40 yrs. MM S/L Part IV Summary (See instructions.) 21 21 Listed property. Enter amount from line 28 22 Total. Add amounts from line 12, lines 14 through 17, lines 19 and 20 in column (9), and line 21. Enter here and on the appropriate lines of your return. Partnerships and S corporations-see instructions 22 23 For assets shown above and placed in service during the current year, enter the portion of the basis attributable to section 263A casts. 23 For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 12906N Form 4562 (2020) TTIST rimpie TZF3F0709 Part I Part of Your Home Used for Business 1 Area used regularly and exclusively for business, regularly for daycare, or for storage of inventory or product samples (see instructions) 1 250 2 Total area of home. 2 2,000 3 Divide line 1 by line 2. Enter the result as a percentage 3 12.5% For daycare facilities not used exclusively for business, go to line 4. All others, go to line 7. 4 Multiply days used for daycare during year by hours used per day 4 hr. 5 If you started or stopped using your home for daycare during the year, see instructions; otherwise, enter 8,760 5 hr. 6 Divide line 4 by line 5. Enter the result as a decimal amount 6 7 Business percentage. For daycare facilities not used exclusively for business, multiply line 6 by line 3 (enter the result as a percentage). All others, enter the amount from line 3 7 12.5% Part II Figure Your Allowable Deduction 8 Enter the amount from Schedule C, line 29, plus any gain derived from the business use of your home, minus any loss from the trade or business not derived from the business use of your home. See instructions. 8 See instructions for columns (a) and (b) before completing lines 9-22. (a) Direct expenses (b) Indirect expenses 9 Casualty losses (see instructions) 9 10 Deductible mortgage interest (see instructions) 10 11 Real estate taxes (see instructions)... 11 12 Add lines 9, 10, and 11 12 13 13 Multiply line 12, column (b), by line 7 14 14 Add line 12, column (a), and line 13 15 15 Subtract line 14 from line 8. If zero or less, enter -0- 16 Excess mortgage interest (see instructions) 16 14 Add line 12, column (a), and line 13 14 15 Subtract line 14 from line 8. If zero or less, enter -0- 15 16 Excess mortgage interest (see instructions). 16 17 Excess real estate taxes (see instructions) 17 18 Insurance 18 19 Rent 19 20 Repairs and maintenance 20 21 Utilities 21 22 Other expenses (see instructions) 22 23 Add lines 16 through 22 23 24 Multiply line 23, column (b), by line 7 24 25 Carryover of prior year operating expenses (see instructions) 25 26 Add line 23, column (a), line 24, and line 25 26 27 Allowable operating expenses. Enter the smaller of line 15 or line 26 27 28 Limit on excess casualty losses and depreciation. Subtract line 27 from line 15 28 29 Excess casualty losses (see instructions) 29 30 Depreciation of your home from line 42 below 30 31 Carryover of prior year excess casualty losses and depreciation (see instructions) 31 32 Add lines 29 through 31 32 33 Allowable excess casualty losses and depreciation. Enter the smaller of line 28 or line 32 33 34 Add lines 14, 27, and 33 34 35 Casualty loss portion, if any, from lines 14 and 33. Carry amount to Form 4684. See instructions 35 36 Allowable expenses for business use of your home. Subtract line 35 from line 34. Enter here and on Schartular line 30. If your homo wa riced for more than one hicinoes see ineturtinne Chapter 08 Comprehensive Problem eBook 32 Add lines 29 through 31 32 33 Allowable excess casualty losses and depreciation. Enter the smaller of line 28 or line 32 33 34 Add lines 14, 27, and 33 34 35 Casualty loss portion, if any, from lines 14 and 33. Carry amount to Form 4684. See instructions 35 36 Allowable expenses for business use of your home. Subtract line 35 from line 34. Enter here and on Schedule C, line 30. If your home was used for more than one business, see instructions 36 Part III Depreciation of Your Home 37 Enter the smaller of your home's adjusted basis or its fair market value. See instructions 37 38 Value of land included on line 37 38 39 Basis of building. Subtract line 38 from line 37 39 40 Business basis of building. Multiply line 39 by line 7 40 41 Depreciation percentage (see instructions) 41 % 42 42 Depreciation allowable (see instructions). Multiply line 40 by line 41. Enter here and on line 30 above..... Part IV Carryover of Unallowed Expenses to 2021 43 Operating expenses. Subtract line 27 from line 26. If less than zero, enter-0- 43 44 44 Excess casualty losses and depreciation. Subtract line 33 from line 32. If less than zero, enter -0- For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 13232M Form 8829 (2020) Feedback Check My Work Partially correct Chapter 08 Comprehensive Problem eBook Trish Himple owns a retail family clothing store. Her store is located at 4321 Heather Drive, Henderson, NV 89002. Her employer identification number is 95-1234321 and her Social Security number is 123-45-6789. Trish keeps her books on an accrual basis. The income and expenses for the year are: Gross sales $340,000 Returns and allowances 14,000 Expenses: Beginning inventory (at cost) $ 85,000 Add: purchases 101,000 Cost of goods available for sale $186,000 Less: ending inventory (at cost) 71,000 Cost of goods sold $115,000 Rent 24,400 Insurance 2,000 Legal and accounting fees 5,000 Payroll 56,400 Payroll taxes 4,400 2,200 Utilities 750 Office supplies 6,200 Advertising Trish's bookkeeper has provided the book-basis fixed asset roll forward to be used in computing the depreciation (see separate tab). For tax purposes, Trish elected out of bonus depreciation in all years except 2020. She did not elect immediate expensing in any year. The tax lives of the assets are the same as the book lives shown in the fixed asset schedule. The truck is not considered a passenger automobile for purposes of the luxury automobile limitations. Trish also has a qualified home office of 250 sq. ft. Her home is 2,000 sq. ft. Her 2015 purchase price and basis in the home, not including land, is $100,000 (the home's market value is $150,000). She incurred the following costs in 2020 related to the entire home: Chapter 08 Comprehensive Problem eBook Trish's bookkeeper has provided the book-basis fixed asset roll forward to be used in computing the depreciation (see separate tab). For tax purposes, Trish elected out of bonus depreciation in all years except 2020. She did not elect immediate expensing in any year. The tax lives of the assets are the same as the book lives shown in the fixed asset schedule. The truck is not considered a passenger automobile for purposes of the luxury automobile limitations. Trish also has a qualified home office of 250 sq. ft. Her home is 2,000 sq. ft. Her 2015 purchase price and basis in the home, not including land, is $100,000 (the home's market value is $150,000). She incurred the following costs in 2020 related to the entire home: Utilities $3,000 Cleaning 1.000 Insurance 1 100 Property taxes 2,000 Required: Complete Trish's Schedule a Form 8829, and Form 4562 (as necessary). Make realistic assumptions about any missing data. Enter all amounts as positive numbers. If an amount box does not require an entry or the answer is zero, enter "O". If required round any dollar amount to the nearest dollar. Schedule of Fixed Asset Rollforward Trish's bookkeeper has provided the following book-basis fixed asset rollforward: Trish's bookkeeper has provided the following book-basis fixed asset rollforward: Himple Retail Fixed Asset Rollforward 12/31/2020 (book basis) DEPR COST 2018 2019 2020 ACCUM NET BOOK ASSET IN SERVICE METHOD LIFE BASIS DEPR DEPR DEPR DEPR VALUE CASH REGISTER 12/15/2018 SL 5 9,900.00 165.00 1,980.00 1,980.00 4,125.00 5,775.00 2018 TOTAL ADDITIONS 9,900.00 165.00 1,980.00 1,980.00 4,125.00 5,775.00 RETAIL FIXTURES 9/12/2019 SL 7 4,750.00 226.19 678.57 904.76 3,845.24 FURNITURE 9/12/2019 SL 7 3,900.00 185.71 557.14 742.85 3,157.15 2019 TOTAL ADDITIONS 8,650.00 411.90 1,235.71 1,647.61 7,002.39 TOTAL 18,550.00 165.00 2,391.90 3,215.71 5,772.61 12,777.39 DELIVERY TRUCK 6/1/2020 SL 5 37,500.00 4,375.00 4,375.00 33,125.00 DESK AND CABINETRY 6/1/2020 SL 7 11,900.00 991.67 991.67 10,908.33 COMPUTER 6/1/2020 SL 5 2,800.00 326.67 326.67 2,473.33 2020 TOTAL ADDITIONS 52,200.00 5,693.34 5,693.34 46,506.66 TOTAL 70,750.00 165.00 2,391.90 8,909.05 11,465.95 59,284.05 I Did you make any payments in 2020 that would require you to file Form(s) 10992 See instructions Yes No J If "Yes," did you or will you file required Form(s) 1099? Yes No Part I Income 1 Gross receipts or sales. See instructions for line 1 and check the box if this income was reported to you on Form W-2 and the "Statutory employee" box on that form was checked 1 340,000 2 Returns and allowances 2 14,000 3 Subtract line 2 from line 1 3 326,000 4 Cost of goods sold (from line 42) 4 115,000 5 Gross profit. Subtract line 4 from line 3 5 211,000 6 Other income, including federal and state gasoline or fuel tax credit or refund (see instructions) 6 7 Gross income. Add lines 5 and 6 7 211,000 Part II Expenses. Enter expenses for business use of your home only on line 30. 8 6,200 8 Advertising 18 18 750 Office expense (see instructions) Pension and profit-sharing plans. 9 Car and truck expenses (see 19 19 instructions).. 20 Rent or lease (see instructions): 9 10 10 Commissions and fees 20a a Vehicles, machinery, and equipment 11 Contract labor (see instructions) 11 b Other business property 20b 24,400 12 Depletion. 12 21 Repairs and maintenance 21 13 Depreciation and section 179 22 Supplies (not included in Part III) .. 22 23 23 expense deduction (not included Taxes and licenses 4,400 in Part III) (see instructions) 13 24 Travel and meals: 24a 14 Employee benefit programs a Travel 24a (other than on line 19). .... 14 b Deductible meals (see TE Inrunnen enthor than hooith! 15 2nnn inertian 24h Chapter 08 Comprehensive Problem eBook in Part III) (see instructions) 13 24 Travel and meals: 14 Employee benefit programs a Travel 24a (other than on line 19)..... 14 b Deductible meals (see 15 Insurance (other than health) 15 2,000 instructions) 24b 16 Interest (see instructions): 25 Utilities 25 2,200 a Mortgage (paid to banks, etc.) 16a 26 Wages (less employment credits) 26 56,400 b Other. 16b 27a Other expenses (from line 48) 27a 17 Legal and professional services 17 5,000 b Reserved for future use 27b 28 Total expenses before expenses for business use of home. Add lines 8 through 27a. 28 29 Tentative profit or (loss). Subtract line 28 from line 7 29 30 Expenses for business use of your home. Do not report these expenses elsewhere. Attach Form 8829 unless using the simplified method. See instructions. Simplified method filers only: Enter the total square footage of (a) your home: and (b) the part of your home used for business: Use the Simplified Method Worksheet in the instructions to figure the amount to enter on line 30 30 31 Net profit or (loss). Subtract line 30 from line 29. If a profit, enter on both Schedule 1 (Form 1040), line 3, and on Schedule SE, line 2. (If you checked the box on line 1, see instructions). Estates and trusts, enter on Form 1041, line 3. } 31 If a loss, you must go to line 32. 32 If you have a loss, check the box that describes your investment in this activity. See instructions. 32a All investment is at If you checked 32a, enter the loss on both Schedule 1 (Form 1040), line 3, and on Schedule SE, line 2. (If you checked the box on line 1, see the line 31 instructions). Estates and trusts, enter on Form 1041, line 3. If you checked 32b, you must attach Form 6198. Your loss may be limited. } risk. 32bSome investment is not at risk. For Paperwork Reduction Act Notice, see the separate instructions. Cat. No. 11334P Schedule C (Form 1040) 2020 Part III Cost of Goods Sold (see instructions) 33 Method(s) used to value closing inventory: a ? Cost b Lower of cost or market COther (attach explanation) 34 Was there any change in determining quantities, costs, or valuations between opening and closing inventory? If "Yes," attach explanation Yes No 35 Inventory at beginning of year. If different from last year's closing inventory, attach explanation 35 85,000 36 Purchases less cost of items withdrawn for personal use 36 101,000 37 Cost of labor. Do not include any amounts paid to yourself. 37 38 Materials and supplies 38 39 Other costs 39 40 Add lines 35 through 39 40 186,000 41 Inventory at end of year 41 71,000 42 Cost of goods sold. Subtract line 41 from line 40. Enter the result here and on line 4 42 115,000 Part IV Information on Your Vehicle. Complete this part only if you are claiming car or truck expenses on line 9 and are not required to file Form 4562 for this business. See the instructions for line 13 to find out if you must file Form 4562. 43 When did you place your vehicle in service for business purposes? (month/day/year) 44 Of the total number of miles you drove your vehicle during 2020, enter the number of miles you used your vehicle for: a c Other Business b c muting (see instructions) Was your vehicle available for personal use during off-duty hours? 45 Yes No 46 Do you (or your spouse) have another vehicle available for personal use? Yes No Yes No 47a Do you have evidence to support your deduction? b If "Yes," is the evidence written? Yes No Part V Other Expenses. List below business expenses not included on lines 8-26 or line 30. Chapter 08 Comprehensive Problem eBook Note: Don't use Part II or Part III below for listed property. Instead, use Part V. Part II Special Depreciation Allowance and Other Depreciation (Don't include listed property. See instructions.) 14 Special depreciation allowance for qualified property (other than listed property) placed in service during the tax year. See instructions. 14 15 Property subject to section 168()(1) election 15 16 Other depreciation (including ACRS). 16 Part III MACRS Depreciation (Don't include listed property. See instructions.) Section A 17 MACRS deductions for assets placed in service in tax years beginning before 2020 17 18 If you are electing to group any assets placed in service during the tax year into one or more general asset accounts, check here Section B-Assets Placed in Service During 2020 Tax Year Using the General Depreciation System (b) Month and (c) Basis for depreciation (a) Classification of (d) Recovery (g) Depreciation year placed in (business/investment use (e) Convention (f) Method property period deduction service only-see instructions) 19a 3-year property b 5-year property 0.7-year property d 10-year property e 15-year property f 20-year property 25 yrs. S/L g 25-year property 27.5 yrs. MM S/L h Residential rental property 27.5 yrs. MM S/L 39 yrs. MM S/L i Nonresidential real Chapter 08 Comprehensive Problem eBook d 10-year property e 15-year property f 20-year property g 25-year property 25 yrs. S/L 27.5 yrs. MM S/L h Residential rental property 27.5 yrs. MM S/L i Nonresidential real 39 yrs. MM S/L property MM S/L Section C-Assets Placed in Service During 2020 Tax Year Using the Alternative Depreciation System 20a Class life S/L b 12-year 12 yrs. S/L c 30-year 30 yrs. MM S/L d 40-year 40 yrs. MM S/L Part IV Summary (See instructions.) 21 21 Listed property. Enter amount from line 28 22 Total. Add amounts from line 12, lines 14 through 17, lines 19 and 20 in column (9), and line 21. Enter here and on the appropriate lines of your return. Partnerships and S corporations-see instructions 22 23 For assets shown above and placed in service during the current year, enter the portion of the basis attributable to section 263A casts. 23 For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 12906N Form 4562 (2020) TTIST rimpie TZF3F0709 Part I Part of Your Home Used for Business 1 Area used regularly and exclusively for business, regularly for daycare, or for storage of inventory or product samples (see instructions) 1 250 2 Total area of home. 2 2,000 3 Divide line 1 by line 2. Enter the result as a percentage 3 12.5% For daycare facilities not used exclusively for business, go to line 4. All others, go to line 7. 4 Multiply days used for daycare during year by hours used per day 4 hr. 5 If you started or stopped using your home for daycare during the year, see instructions; otherwise, enter 8,760 5 hr. 6 Divide line 4 by line 5. Enter the result as a decimal amount 6 7 Business percentage. For daycare facilities not used exclusively for business, multiply line 6 by line 3 (enter the result as a percentage). All others, enter the amount from line 3 7 12.5% Part II Figure Your Allowable Deduction 8 Enter the amount from Schedule C, line 29, plus any gain derived from the business use of your home, minus any loss from the trade or business not derived from the business use of your home. See instructions. 8 See instructions for columns (a) and (b) before completing lines 9-22. (a) Direct expenses (b) Indirect expenses 9 Casualty losses (see instructions) 9 10 Deductible mortgage interest (see instructions) 10 11 Real estate taxes (see instructions)... 11 12 Add lines 9, 10, and 11 12 13 13 Multiply line 12, column (b), by line 7 14 14 Add line 12, column (a), and line 13 15 15 Subtract line 14 from line 8. If zero or less, enter -0- 16 Excess mortgage interest (see instructions) 16 14 Add line 12, column (a), and line 13 14 15 Subtract line 14 from line 8. If zero or less, enter -0- 15 16 Excess mortgage interest (see instructions). 16 17 Excess real estate taxes (see instructions) 17 18 Insurance 18 19 Rent 19 20 Repairs and maintenance 20 21 Utilities 21 22 Other expenses (see instructions) 22 23 Add lines 16 through 22 23 24 Multiply line 23, column (b), by line 7 24 25 Carryover of prior year operating expenses (see instructions) 25 26 Add line 23, column (a), line 24, and line 25 26 27 Allowable operating expenses. Enter the smaller of line 15 or line 26 27 28 Limit on excess casualty losses and depreciation. Subtract line 27 from line 15 28 29 Excess casualty losses (see instructions) 29 30 Depreciation of your home from line 42 below 30 31 Carryover of prior year excess casualty losses and depreciation (see instructions) 31 32 Add lines 29 through 31 32 33 Allowable excess casualty losses and depreciation. Enter the smaller of line 28 or line 32 33 34 Add lines 14, 27, and 33 34 35 Casualty loss portion, if any, from lines 14 and 33. Carry amount to Form 4684. See instructions 35 36 Allowable expenses for business use of your home. Subtract line 35 from line 34. Enter here and on Schartular line 30. If your homo wa riced for more than one hicinoes see ineturtinne Chapter 08 Comprehensive Problem eBook 32 Add lines 29 through 31 32 33 Allowable excess casualty losses and depreciation. Enter the smaller of line 28 or line 32 33 34 Add lines 14, 27, and 33 34 35 Casualty loss portion, if any, from lines 14 and 33. Carry amount to Form 4684. See instructions 35 36 Allowable expenses for business use of your home. Subtract line 35 from line 34. Enter here and on Schedule C, line 30. If your home was used for more than one business, see instructions 36 Part III Depreciation of Your Home 37 Enter the smaller of your home's adjusted basis or its fair market value. See instructions 37 38 Value of land included on line 37 38 39 Basis of building. Subtract line 38 from line 37 39 40 Business basis of building. Multiply line 39 by line 7 40 41 Depreciation percentage (see instructions) 41 % 42 42 Depreciation allowable (see instructions). Multiply line 40 by line 41. Enter here and on line 30 above..... Part IV Carryover of Unallowed Expenses to 2021 43 Operating expenses. Subtract line 27 from line 26. If less than zero, enter-0- 43 44 44 Excess casualty losses and depreciation. Subtract line 33 from line 32. If less than zero, enter -0- For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 13232M Form 8829 (2020) Feedback Check My Work Partially correct