Income Tax Fundamentals 2020
38th Edition
ISBN: 9780357391129
Author: WHITTENBURG
Publisher: Cengage
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Textbook Question
Chapter 3, Problem 21P
Cindy operates a computerized engineering drawing business from her home. Cindy maintains a home office and properly allocates the following expenses to her office:
Depreciation $1,500
Utilities 500
Real estate taxes 325
Mortgage interest (100 percent deductible) 500
- Assume that Cindy earns income of $4,400 from her business for the year before deducting home office expenses. She has no other expenses associated with the business. Calculate Cindy's deduction for home office expenses.
- Assume that Cindy earns income of $2,600 from her business during the year before deducting home office expenses. Calculate Cindy's deduction for home office expenses.
$__________
$__________
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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.
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Chapter 3 Solutions
Income Tax Fundamentals 2020
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