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Jafar is self-employed and has a home office. He has come to you for advice for deductions relating to his home office. The total square
- Jafar is self-employed and has a home office. He has come to you for advice for deductions relating to his home office. The total square footage of his home is 4,000. The square footage of his office is 400. He has provided the following information as well. (8 Points)
| General Info | |
| Sales Revenue | $80,000 |
| COGS | $40,000 |
| Advertising | $1,000 |
| Home Office Info | |
| Mortgage Interest | $6,000 |
| Insurance | $2,000 |
| Property Taxes | $6,000 |
| Utilities | $1,500 |
| Depreciation (whole house) | $10,000 |
- Based on the above information what is Jafars home office deduction for the current year using the regular method? Show all work
- Based on the above information what is Jafars home office deduction for the current year using the simplified method? Show all work
- What information should Jafar be advised regarding the deduction? Include in your answer the requirements for taking a home office deduction and your recommendation for which method he should use.
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Managing Financial Resources
Authors: Mick Broadbent, John Cullen
3rd Edition
1138134546, 978-1138134546
