Rhea Xu is a self-employed professional singer. She resides in a rented apartment and uses one room exclusively as a business office. This room includes 390 of the 2,600 square feet of living space in the apartment. Ms. Xu performs in recording studios and concert halls, but she conducts all of the administrative duties with respect to the business in her home office. This year, Ms. Xu's apartment rent was $59,000. She paid $6,300 to a housekeeping service that cleaned the entire apartment once a week and $3,100 for renter's insurance on the apartment furnishings. Required: 1. Compute Ms. Xu's home office deduction assuming that her net profit before the deduction was $410,000. 2. Compute Ms. Xu's home office deduction assuming that her net profit before the deduction was $5,100.
Rhea Xu is a self-employed professional singer. She resides in a rented apartment and uses one room exclusively as a business office. This room includes 390 of the 2,600 square feet of living space in the apartment. Ms. Xu performs in recording studios and concert halls, but she conducts all of the administrative duties with respect to the business in her home office. This year, Ms. Xu's apartment rent was $59,000. She paid $6,300 to a housekeeping service that cleaned the entire apartment once a week and $3,100 for renter's insurance on the apartment furnishings. Required: 1. Compute Ms. Xu's home office deduction assuming that her net profit before the deduction was $410,000. 2. Compute Ms. Xu's home office deduction assuming that her net profit before the deduction was $5,100.
Chapter5: Introduction To Business Expenses
Section: Chapter Questions
Problem 59P
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Question
Transcribed Image Text:Rhea Xu is a self-employed professional singer. She resides in a rented apartment and uses one room exclusively as a business
office. This room includes 390 of the 2,600 square feet of living space in the apartment. Ms. Xu performs in recording studios and
concert halls, but she conducts all of the administrative duties with respect to the business in her home office. This year, Ms. Xu's
apartment rent was $59,000. She paid $6,300 to a housekeeping service that cleaned the entire apartment once a week and
$3,100 for renter's insurance on the apartment furnishings.
Required:
1. Compute Ms. Xu's home office deduction assuming that her net profit before the deduction was $410,000.
2. Compute Ms. Xu's home office deduction assuming that her net profit before the deduction was $5,100.
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