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 $5,620. 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 | $ 1,610 |
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Interest on home mortgage | 5,115 |
Operating expenses of home | 805 |
Depreciation | 1,606 |
Also, assume that, not counting the sole proprietorship, Ritas AGI is $60,200. 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 $15,050 in gross income. (Leave no answer blank. Enter zero if applicable.)
a. What is Ritas home office deduction for the current year?
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