Kane has a qualified home office which takes up 350 square feet of his 1,400 square foot home. Kane's indirect applicable home expenses total $3,848, and his allowable depreciation from the business use of the home is $987. Which method would be most advantageous for Kane when determining his home office deduction, and how much is the deduction? Simplified; $1,209. Actual; $ 4,835. Simplified; $1,500. Actual; $1,949.

Kane has a qualified home office which takes up 350 square feet of his 1,400 square foot home. Kane's indirect applicable home expenses total $3,848, and his allowable depreciation from the business use of the home is $987. Which method would be most advantageous for Kane when determining his home office deduction, and how much is the deduction? Simplified; $1,209. Actual; $ 4,835. Simplified; $1,500. Actual; $1,949.

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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Subject : Accounting
Ac. Which of the following statements regarding the home office deduction is true? In order to qualify for the deduction, a portion of the taxpayer's home must be used regularly and exclusively to meet with clients or customers. A home office deduction is not allowed for using the home office for administrative or management activities only. The home office deduction is limited to the taxable income of the business before the deduction. A depreciation deduction is not allowed for a home office.
Ee 262.
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