Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
image text in transcribed
image text in transcribed
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 $5,900. 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 $ 1,750 Interest on home mortgage 5,325 Operating expenses of home 875 Depreciation 1,690 Also, assume that not counting the sole proprietorship. Rita's AGI is $63,000. 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 Rita's consulting business generated $15,750 in gross income (Leave no answer blank. Enter zero if applicable.) a. What is Rita's home office deduction for the current year? Home office deduction c. Given the original facts, what is Rita's AGI for the year? AGI d. Given the original facts, what types and amounts of expenses will she carry over to next year? Tier 1 expenses carried over to next year Tier 2 expenses carried over to next year Tier 3 expenses carried over to next year

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Economics In Minutes 200 Key Concepts Explained In An Instant

Authors: Niall Kishtainy

1st Edition

1782066470, 9781782066477

More Books

Students also viewed these Accounting questions

Question

What are three factors that determine current labor supply?

Answered: 1 week ago