Homework - Week 7 Deductions: Employee and...

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Week 7 Deductions: Employee and Self-Employed-Related Expenses Deductions and Losses: Certain Itemized Deductions Assignment for Week 7 --- ACC 307 Federal Income Taxes Chapter 9 Page 9-47: Problem 46 Christine is employed full-time as an accountant for a national hardware chain. She also has a private consulting practice, which provides tax advice and financial planning to the general public. For this purpose, she maintains an office in her home. Expenses relating to her home are as follows: o Real property taxes 3,900 o Interest on home mortgage 4,000 o Operating expenses of home 1,100 o Depreciation allocated to 20% business use 1,600 Christine’s income from consulting is $16,000, and the related expenses are $5,000. a. What is Christine’s office in the home deductions? Business Income 16,000 Less: other business expenses (5,000) 11,000 Less: Allocable taxes (3,900x20%) 780 Allocable interest (4,000x20%) 800 (1,550) 9,450 Allocable operating expenses of the residence (1,100x20%) (220) 9,230 Allocable depreciation ($250, limited to Remaining income) (1,600) 7,630 b. Suppose that Christine also spent $3,000 to repaint and replace the carpet in the office. How do these additional costs change the answer to part (a)?
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This note was uploaded on 02/08/2010 for the course ACC317 adv. feder taught by Professor Man during the Spring '10 term at Strayer.

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Homework - Week 7 Deductions: Employee and...

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