[The following information applies to the questions displayed below.] 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 $5,600. 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 Interest on home mortgage Operating expenses of home Depreciation $ 1,600 5,100 800 1,600 Also, assume that, not counting the sole proprietorship, Rita's AGI is $60,000. 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 Rita's consulting business generated $13,000 in gross income for the current year. Further, assume Rita uses the actual expense method for computing her home office expense deduction. a. What is Rita's home office deduction for the current year? Home office deduction < Prev 15 16 17 of 23 Next > b. What is Rita's AGI for the year? AGI < Prev 16 17 of 23 Next > c. What types and amounts of expenses will she carry over to next year? Note: Leave no answer blank. Enter zero if applicable. Tier 1 expenses carried over to next year Tier 2 expenses carried over to next year. Tier 3 expenses carried over to next year Amount
[The following information applies to the questions displayed below.] 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 $5,600. 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 Interest on home mortgage Operating expenses of home Depreciation $ 1,600 5,100 800 1,600 Also, assume that, not counting the sole proprietorship, Rita's AGI is $60,000. 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 Rita's consulting business generated $13,000 in gross income for the current year. Further, assume Rita uses the actual expense method for computing her home office expense deduction. a. What is Rita's home office deduction for the current year? Home office deduction < Prev 15 16 17 of 23 Next > b. What is Rita's AGI for the year? AGI < Prev 16 17 of 23 Next > c. What types and amounts of expenses will she carry over to next year? Note: Leave no answer blank. Enter zero if applicable. Tier 1 expenses carried over to next year Tier 2 expenses carried over to next year. Tier 3 expenses carried over to next year Amount
Chapter3: Income Sources
Section: Chapter Questions
Problem 30P
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![[The following information applies to the questions displayed below.]
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 $5,600. 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
Interest on home mortgage
Operating expenses of home
Depreciation
$ 1,600
5,100
800
1,600
Also, assume that, not counting the sole proprietorship, Rita's AGI is $60,000. 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 Rita's consulting business generated $13,000 in gross income for the current year. Further,
assume Rita uses the actual expense method for computing her home office expense deduction.
a. What is Rita's home office deduction for the current year?
Home office deduction
< Prev
15
16 17
of 23
Next >
b. What is Rita's AGI for the year?
AGI
< Prev
16 17 of 23
Next >
c. What types and amounts of expenses will she carry over to next year?
Note: Leave no answer blank. Enter zero if applicable.
Tier 1 expenses carried over to next year
Tier 2 expenses carried over to next year.
Tier 3 expenses carried over to next year
Amount](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa56bf93b-7435-4700-bc31-504b5cfe0556%2F6519d5b8-fd63-45b3-a1be-7c8ff5967d62%2Fdx7p7g_processed.png&w=3840&q=75)
Transcribed Image Text:[The following information applies to the questions displayed below.]
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 $5,600. 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
Interest on home mortgage
Operating expenses of home
Depreciation
$ 1,600
5,100
800
1,600
Also, assume that, not counting the sole proprietorship, Rita's AGI is $60,000. 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 Rita's consulting business generated $13,000 in gross income for the current year. Further,
assume Rita uses the actual expense method for computing her home office expense deduction.
a. What is Rita's home office deduction for the current year?
Home office deduction
< Prev
15
16 17
of 23
Next >
b. What is Rita's AGI for the year?
AGI
< Prev
16 17 of 23
Next >
c. What types and amounts of expenses will she carry over to next year?
Note: Leave no answer blank. Enter zero if applicable.
Tier 1 expenses carried over to next year
Tier 2 expenses carried over to next year.
Tier 3 expenses carried over to next year
Amount
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