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 $5,780. 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 | $ 1,690 |
---|---|
Interest on home mortgage | 5,235 |
Operating expenses of home | 845 |
Depreciation | 1,654 |
Also, assume that, not counting the sole proprietorship, Ritas AGI is $61,800. 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 $15,450 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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