Cindy, who is self-employed, maintains an office in her home that comprises 10% (340 square feet) of total floor space. Gross income for her business is $54,650, and her residence expenses are as follows: Real property taxes $4,092 Interest on mortgage 6,820 Operating expenses 3,410 Depreciation (based on 10% business use) 8,075 a.  What is Cindy's office in the home deduction based on the regular method? b.  What is Cindy's office in the home deduction based on the simplified method?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Cindy, who is self-employed, maintains an office in her home that comprises 10% (340 square feet) of total floor space. Gross income for her business is $54,650, and her residence expenses are as follows:

Real property taxes $4,092
Interest on mortgage 6,820
Operating expenses 3,410
Depreciation (based on 10% business use) 8,075

a.  What is Cindy's office in the home deduction based on the regular method?

b.  What is Cindy's office in the home deduction based on the simplified method?

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