Cindy operates a computerized engineering drawing business from her home. Cindy maintains a home office and properly allocates the following expenses to her office: Depreciation $1,500 Utilities 500 Real estate taxes 325 Mortgage interest (100 percent deductible) 500 a. Assume that Cindy earns income of $4,400 from her business for the year before deducting home office expenses. She has no other expenses associated with the business. Calculate Cindy's deduction for home office expenses. b. Assume that Cindy earns income of $2,600 from her business during the year before deducting home office expenses. Calculate Cindy's deduction for home office expenses.
Cindy operates a computerized engineering drawing business from her home. Cindy maintains a home office and properly allocates the following expenses to her office: Depreciation $1,500 Utilities 500 Real estate taxes 325 Mortgage interest (100 percent deductible) 500 a. Assume that Cindy earns income of $4,400 from her business for the year before deducting home office expenses. She has no other expenses associated with the business. Calculate Cindy's deduction for home office expenses. b. Assume that Cindy earns income of $2,600 from her business during the year before deducting home office expenses. Calculate Cindy's deduction for home office expenses.
Chapter3: Business Income And Expenses
Section: Chapter Questions
Problem 21P: Cindy operates a computerized engineering drawing business from her home. Cindy maintains a home...
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Transcribed Image Text:Cindy operates a computerized engineering drawing business from her home. Cindy maintains a home office and properly allocates the
following expenses to her office:
Depreciation
$1,500
Utilities
500
Real estate taxes
325
Mortgage interest (100 percent deductible)
500
a. Assume that Cindy earns income of $4,400 from her business for the year before deducting home office expenses. She has no
other expenses associated with the business.
Calculate Cindy's deduction for home office expenses.
b. Assume that Cindy earns income of $2,600 from her business during the year before deducting home office expenses.
Calculate Cindy's deduction for home office expenses.
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT