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Question - 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
Required -
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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