c. Given the original facts, what is Rita's AGI for the year? 6.500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 $5,960. The following home-related expenses have been allocated to her home office under the actual expense method for
calculating home office expenses.
AGI
Real property taxes
Interest on home mortgage
Operating expenses of home
Depreciation
Also, assume that, not counting the sole proprietorship, Rita's AGI is $63,600. 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 $15,900 In gross income.
Note: Leave no answer blank. Enter zero if applicable.
c. Given the original facts, what is Rita's AGI for the year?
$
$ 1,780
5,370
890
1,708
79,500](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7a4f5734-52e7-4f29-9f05-2839f32c717a%2F4ce17f7a-7965-4dbe-be9f-5e896af098fe%2Fzo39h8i_processed.jpeg&w=3840&q=75)
Transcribed Image Text:S
!
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 $5,960. The following home-related expenses have been allocated to her home office under the actual expense method for
calculating home office expenses.
AGI
Real property taxes
Interest on home mortgage
Operating expenses of home
Depreciation
Also, assume that, not counting the sole proprietorship, Rita's AGI is $63,600. 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 $15,900 In gross income.
Note: Leave no answer blank. Enter zero if applicable.
c. Given the original facts, what is Rita's AGI for the year?
$
$ 1,780
5,370
890
1,708
79,500
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