Question
. Melanie is employed full-time as an accountant for a national hardware chain. She also has a private consulting practice, which provides tax advice and
. Melanie is employed full-time as an accountant for a national hardware chain. She also has a private consulting practice, which provides tax advice and financial planning to the general public. For this purpose, she maintains an office in her home. Expenses relating to her home are as follows: Real property taxes $3,600 Interest on home mortgage 3,800 Operating expenses of home 900 Depreciation allocated to 20% business use 1,500 Melanies income from consulting is $17,000, and the related expenses are $5,000. a. What is Melanies office in the home deduction? b. Suppose Melanie also spent $4,000 to repaint and replace the carpet in the office. How do these additional costs change the answer to part (a)? c. Suppose Melanies income from consulting is only $8,000 (not $17,000). How does this change the answer to part (a)?
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