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

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?

$

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_2

Step: 3

blur-text-image_3

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

Forensic Analytics Methods And Techniques For Forensic Accounting Investigations

Authors: Mark J. Nigrini

1st Edition

0470890460, 978-0470890462

More Books

Students also viewed these Accounting questions

Question

10. Compute the range, mean, median, and mode for the given data.

Answered: 1 week ago

Question

Dont off er e-mail communication if you arent going to respond.

Answered: 1 week ago