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a. What is Rita's home office deduction for the current year? Home office deduction

a. What is Rita's home office deduction for the current year? Home office deduction

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Required information [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 $5,975. 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 $1,675 5,225 675 1,700 Also, assume that not counting the sole proprietorship, Rita's AGI is $61,250. Assume Rita's consulting business generated $13,425 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
Transcribed Image Text:Required information [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 $5,975. 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 $1,675 5,225 675 1,700 Also, assume that not counting the sole proprietorship, Rita's AGI is $61,250. Assume Rita's consulting business generated $13,425 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
b. What is Rita's AGI for the year? AGI
Transcribed Image Text:b. What is Rita's AGI for the year? AGI
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