Perform the administrative functions related to business

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Reference no: EM131891616

Question: Mark Pari is a self-employed electrician who exclusively uses a room in his home to perform the administrative functions related to his business. The room is 250 square feet of the 2,500 total square feet of his home. Mark's income from his business before considering the cost of his home office is $62,890. He incurs the following expenses related to his home:

Mortgage interest $10,000

Property taxes 1,500

Insurance 600

Gas and electric 1,800

Repairs and maintenance 500

Cable television 350

Phone ($15 per month for a separate phone

number for the office) 420

House cleaning 1,400

Long-distance phone calls (business-related) 670

Kitchen renovations 4,700

Assume that the home is worth $200,000. Mark's basis is 140,000, the value of the land is 20% of basis, and the applicable depreciation percentage is 2.564%. Complete form 8829 using the above information. Mark's Social Security number is 136-42-5677. Forms and instructions can be downloaded from the IRS Web site.

Reference no: EM131891616

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