Question
Farah has come to you for tax advice on her home office. She is self-employed and has a home office. The total square footage of
Farah has come to you for tax advice on her home office. She is self-employed and has a home office. The total square footage of her home is 2,500. The square footage of his office is 400. She has provided the following information as well. (8 Points)
| General Info | |
| Sales Revenue | $100,000 |
| COGS | $35,000 |
| Advertising | $2,000 |
| Home Office Info | |
| Mortgage Interest | $8,000 |
| Insurance | $3,000 |
| Property Taxes | $6,000 |
| Utilities | $2,500 |
| Depreciation (whole house) | $10,000 |
Based on the above information what is Farahs home office deduction for the current year using the regular method? Show all work
Based on the above information what is Farahs home office deduction for the current year using the simplified method? Show all work
What information should Farah be advised regarding the deduction? Include in your answer the requirements for taking a home office deduction and your recommendation for which method she should use.
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Financial and managerial accounting
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
1st edition
111800423X, 9781118233443, 1118016114, 9781118004234, 1118233441, 978-1118016114
