Question
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
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 $5,940. 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 | $ 1,770 |
---|---|
Interest on home mortgage | 5,355 |
Operating expenses of home | 885 |
Depreciation | 1,702 |
Also, assume that, not counting the sole proprietorship, Rita's AGI is $63,400. 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 $15,850 in gross income.
Note: Leave no answer blank. Enter zero if applicable.
a. What is Rita's home office deduction for the current year?