Sabin is an artist and maintains an office (his studio) in his home. His office occupies 8% of the total floor space of his residence. Gross income from his business is $24,000. Expenses of the business (other than home office expenses) are $5,000. Sabin incurs the following home office expenses: Real property taxes on residence: $2,400 Interest expense on residence: $4,000 Operating expenses of residence: $2,200 Depreciation on residence (based on 8% business use): $450. A) Assuming Sabin uses the "regular method" to compute the office in the home deduction, his deduction is ? B) Assuming Sabin uses the "simplifed method" to computer the office in the home deduction, his deduction is?
Sabin is an artist and maintains an office (his studio) in his home. His office occupies 8% of the total floor space of his residence. Gross income from his business is $24,000. Expenses of the business (other than home office expenses) are $5,000. Sabin incurs the following home office expenses: Real property taxes on residence: $2,400 Interest expense on residence: $4,000 Operating expenses of residence: $2,200 Depreciation on residence (based on 8% business use): $450. A) Assuming Sabin uses the "regular method" to compute the office in the home deduction, his deduction is ? B) Assuming Sabin uses the "simplifed method" to computer the office in the home deduction, his deduction is?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Sabin is an artist and maintains an office (his studio) in his home. His office occupies 8% of the total floor space of his residence. Gross income from his business is $24,000. Expenses of the business (other than home office expenses) are $5,000. Sabin incurs the following home office expenses:
Real property taxes on residence: $2,400
Interest expense on residence: $4,000
Operating expenses of residence: $2,200
Depreciation on residence (based on 8% business use): $450.
A) Assuming Sabin uses the "regular method" to compute the office in the home deduction, his deduction is ?
B) Assuming Sabin uses the "simplifed method" to computer the office in the home deduction, his deduction is?
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