Income Tax Fundamentals 2020
38th Edition
ISBN: 9780357391129
Author: WHITTENBURG
Publisher: Cengage
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Chapter 3, Problem 24P
To determine
Introduction: When a business is operated from home, taxpayers can claim deductions but with certain strict limits imposed by tax laws. The general rule says that home office deduction is not allowed for dwelling units used by the taxpayer as a residence, the deduction is allowed if the home office is used on regular basis as a place of business, if the area is used for both business and personal purpose then the deduction is not allowed.
A’s home office deductions.
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Ann is a self-employed restaurant critic who does her work exclusively from a home office. Ann's income is $25,000 before the home office deduction this year. Her office takes up 200 square feet of her 1,000-square-foot apartment. The total expenses for her apartment are $6,000 for rent, $1,000 for utilities, $200 for renter's insurance, and $800 for pest control and other maintenance.
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Chapter 3 Solutions
Income Tax Fundamentals 2020
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