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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 $5,820. 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 $ 1,710
Interest on home mortgage 5,265
Operating expenses of home 855
Depreciation 1,666

Also, assume that, not counting the sole proprietorship, Ritas AGI is $62,200.

Assume Ritas consulting business generated $15,550 in gross income. (Leave no answer blank. Enter zero if applicable.)

a. What would Ritas home office deduction be if her business generated $10,550 of gross income instead of $15,550? (Answer for both the actual expense method and the simplified method.)

b. Given the original facts, what is Ritas AGI for the year?

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