Answered step by step
Verified Expert Solution
Question
1 Approved Answer
! Required information [The following information applies to the questions displayed below.] Rita owns a sole proprietorship in which she works as a management consultant.
! Required information [The following information applies to the questions displayed below.] Rita owns a sole proprietorship in which she works as a management consultant. She maintains an office in her home (500 square feet) where she meets with clients, prepares bills, and performs other work-related tasks. Her business expenses, other than home office expenses, total $5,660. The following home-related expenses have been allocated to her home office under the actual expense method for calculating home office expenses. Real property taxes Interest on home mortgage Operating expenses of home Depreciation $ 1,630 5,145 815 1,618 Also, assume that, not counting the sole proprietorship, Rita's AGI is $60,600. Rita itemizes deductions, and her itemized deduction for non-home business taxes is less than $10,000 by more than the real property taxes allocated to business use of the home. Assume Rita's consulting business generated $15,150 in gross income. (Leave no answer blank. Enter zero if applicable.) b. What would Rita's home office deduction be if her business generated $10,150 of gross income instead of $15,150? (Answer for both the actual expense method and the simplified method.) Actual expense method Simplified method $ 1,500
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started