**Home Office Deduction Analysis: Understanding Cindy's Deductions**Cindy maintains an office in her home that comprises 8% (200 square feet) of total floor space. Gross income for her business is $42,000, and her residence expenses are as follows:| Expense Category | Amount ||------------------------------|----------|| Real property taxes | $2,400 || Interest on mortgage | $4,000 || Operating expenses | $2,200 || Depreciation (based on 8% business use) | $450 |**Graph/Diagram Explanation:**The table above outlines Cindy's primary residence expenses applicable for deductions. These are categorized into real property taxes, mortgage interest, operating expenses, and a calculated depreciation for 8% business use.**Home Office Deduction Calculation Methods:**1. **The Regular Method:** - Calculates deduction based on the percentage of the home devoted to business use. - Includes direct and proportional indirect expenses related to business activity.2. **The Simplified Method:** - Allows a standard deduction of $5 per square foot of home used for business, up to a maximum of 300 square feet.**Assignment:**Calculate Cindy’s office in the home deduction using both:a. The Regular Methodb. The Simplified MethodThis exercise will help you understand which method offers greater advantages and how different factors influence the deductible amount.

calculation of Cindy's office in the home deduction under regular method and simplified method are…

LO.5 Cindy maintains an office in her home that comprises 8% (200 square feet) of total floor space. Gross income for her business is $42,000, and her residence expenses are as follows: Real property taxes Interest on mortgage Operating expenses Depreciation (based on 8% business use) $2,400 4,000 2,200 450 What is Cindy's office in the home deduction based on: a. The Regular Method?

LO.5 Cindy maintains an office in her home that comprises 8% (200 square feet) of total floor space. Gross income for her business is $42,000, and her residence expenses are as follows: Real property taxes Interest on mortgage Operating expenses Depreciation (based on 8% business use) $2,400 4,000 2,200 450 What is Cindy's office in the home deduction based on: a. The Regular Method?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Steven is an accountant and maintains an office in his home. Expenses of the business (other than home office expenses) are $15,000. Steven incurs the following home office expenses: Real property taxes on residence: $2,400 Interest expense on residence: $4,000 Operating expenses of residence: $3,200 Depreciation on residence (based on 8% business use): $450. His office occupies 10% of the total floor space of his residence. Gross income from his business is $34,000. Assuming that Steven uses the regular method, what is his allowable office in the home deduction?
Please right answer
Rocky repairs TV sets in the basement of his personal residence. Rocky uses 450 square feet (20%) of his residence exclusively for the repair business. Business profit is $4,000 before any office-in-home expenses are deducted. Expenses relating to the residence are as follows: Real property taxes $5,500 Interest on home mortgage 7,000 Operating expenses of residence 3,000 Depreciation (100% amount) 5,000 The maximum home office expense deduction he can take in 2020 using the regular (actual expense) method is _____. The amount of expenses Rocky would carryover to 2021 if he uses the regular method is _____. The amount of home office expense deduction he can take in 2021 using the simplified method is _____. The amount of expenses Rocky would carryover to 2021 if he uses the simplified method is ____. Rocky should use the regular method or the simplified method? _____
Can someone please help me with this question?
An individual is a head of household. What is her standard deduction? a.$18,350 b.$24,800 c.$12,400 d.$18,650 e.None of these choices are correct.
J2. Luke is a self-employed attorney. He maintains an office in his home that is exclusively dedicated to his work. The room occupies 10% of the floor space of the home. Luke incurs the following expenses: Electricity - $2,000 Wallpapering the office - $1,000 Re-roofing the house - $7,000 What is the amount of Luke's home office expense deduction?
LO.3 Vella owns and operates an illegal gambling establishment. In connection with this activity, he has the following expenses during the year: Rent $ ‍24,000Bribes 40,000Travel expenses 4,000Utilities 18,000Wages 230,000Payroll taxes 13,800Property insurance 1,600Illegal kickbacks 22,000What are Vella’s total deductible expenses for tax purposes?
during 2017, Regina, a sole proprietor, had the following income and expenses from herhome jewelry business. Regina is also employed as an office assistant at a local business. W-2 wages from employer$28,000 Proceeds from jewelry sales15,000 Supplies for jewelry5,000 Travel for jewelry1,400 Charitable contributions to church3,000 a.What income or loss should be reported on Schedule C? b.What is Regina's AGI?
QUESTION E This is the first year a taxpayer has used a vehicle for business. They drive 6,000 business miles. They also drove 4,000 personal miles. They had the lowing expenses. Gas $1,400 Maintenance $200 Insurance $600 Parking Fees $100 The taxpayer olects the actual expense method for calculating transportation deductions. What is their transportation tax deduction? O $920 O $1,320 O $1,420 O $1,380
Manji
Please Solve In 10mins
Last year, lana purchased a $100,000 account receivable for $90,000. During the current year, Lucy collected $97,000 on the account. What are the tax consequences to Lucy associated with the collection of the account receivable? No subsequent collections are expected. a.$7,000 gain b.$3,000 loss c.$13,000 loss d.$2,000 gain