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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 $5,600. The following home-related expenses have been allocated to her home office under the actual expense method for calculating home office expenses. (Answer for both the actual expense method and the simplified method). (Leave no answer blank. Enter zero if applicable.)

Real property taxes $1,600
Interest on home mortgage 5,100
Operating expenses of home 800
Depreciation 1,600

Also, assume that not counting the sole proprietorship, Ritas AGI is $60,000.

Assume Ritas consulting business generated $15,000 in gross income.

a.

What is Ritas home office deduction for the current year? $9100

What would Ritas home office deduction for the current year be if her business generated $10,000 of gross income instead of $15,000?

Actual Expense Method is $6700

Simplified Method is ???????

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