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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.

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, Rita's AGI is $60,000. 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 Ritas consulting business generated $13,000 in gross income for the current year. Further, assume Rita uses the actual expense method for computing her home office expense deduction.

a. What is Ritas home office deduction for the current year?

b. What is Ritas AGI for the year?

c. Assuming the original facts, what types and amounts of expenses will she carry over to next year? (Leave no answer blank. Enter zero if applicable.)

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