Q3

Sergio operates a sole proprietorship. He has a home office that functions as his principal place of business. He uses the home office regularly and exclusively for his business. The home office is 250 sq. ft. The allocable share of home expenses attributable to the home office are as follows: - Allocable taxes: $1,500 - Allocable mortgage interest: $3,200 - Allocable home operation expenses (utilites, etc.): $800 - Allocable depreciation: $1,000 What is Sergio's 2022 home office deduction for 2022 if Sergio's net income from the business (before home office deduction) is $100,000 ? What is Sergio's 2022 home office deduction for 2022 if Sergio's net income from the business (before home office deduction) is $6,000 ? What would Sergio's 2022 home office deduction be if Sergio used the safe harbor method to calculate the deduction? Why might a taxpayer choose to use the safe harbor method? Would your answers change if Sergio is an employee, not an independent contractor? Sergio operates a sole proprietorship. He has a home office that functions as his principal place of business. He uses the home office regularly and exclusively for his business. The home office is 250 sq. ft. The allocable share of home expenses attributable to the home office are as follows: - Allocable taxes: $1,500 - Allocable mortgage interest: $3,200 - Allocable home operation expenses (utilites, etc.): $800 - Allocable depreciation: $1,000 What is Sergio's 2022 home office deduction for 2022 if Sergio's net income from the business (before home office deduction) is $100,000 ? What is Sergio's 2022 home office deduction for 2022 if Sergio's net income from the business (before home office deduction) is $6,000 ? What would Sergio's 2022 home office deduction be if Sergio used the safe harbor method to calculate the deduction? Why might a taxpayer choose to use the safe harbor method? Would your answers change if Sergio is an employee, not an independent contractor