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McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
Edition 3ISBN: 9780078111068McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
Edition 3ISBN: 9780078111068 Exercise 29
Assume Rita's consulting business generated $13,000 in gross income for the current year.
a.What is Rita's home office deduction for the current year?
b.What is Rita's AGI for the year?
c.Assume the original facts, except that Rita is an employee, and not self-employed (she uses the home office for the convenience of the employer).Consequently, she does not receive any gross income from the (sole proprietorship) business and she does not incur any business expenses unrelated to the home office.Finally, her AGI is $60,000 consisting of salary from her work as an employee.What effect do her home office expenses have on her itemized deductions?
d.Assuming the original facts, what types and amounts of expenses will she carry over to next year?
a.What is Rita's home office deduction for the current year?
b.What is Rita's AGI for the year?
c.Assume the original facts, except that Rita is an employee, and not self-employed (she uses the home office for the convenience of the employer).Consequently, she does not receive any gross income from the (sole proprietorship) business and she does not incur any business expenses unrelated to the home office.Finally, her AGI is $60,000 consisting of salary from her work as an employee.What effect do her home office expenses have on her itemized deductions?
d.Assuming the original facts, what types and amounts of expenses will she carry over to next year?
Explanation
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a.$7,400, calculated as follows: 
Rita i...
McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
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