MEMORANDUM #1 TO: Tax Associate FROM: Partner SUBJECT: Research Memorandum Facts: Our client performs bookkeeping work for her clients. She performs most of her client work at the client's office. She has about ten clients and spends about 4 hours per client each week at the client's office. She also has a dedicated office at her home where she does all of her administrative work for her business. The administrative work she performs is at her home office to include billing, record keeping, and training. Area of her home used for business - 500 square feet Total area of home - 5,000 square feet Annual indirect costs o Gross income from business - $100,000 o o Deductible mortgage interest - $25,000 o Real estate taxes - $1,500 o Utilities - $2,500 Ignore depreciation for this assignment. . o O . Questions: 3. Is there a code section that applies to our fact pattern? a. If so, what it is it? b. Provide a summary in your own words the requirements of the code section. C. Please provide an analysis of the application of the law and compare/contrast to our client's fact pattern on proving whether she is entitled to a deduction or not. d. Attach a copy of the code section and highlight the pertinent areas that applies to your summary