Question

Question 73 of 75. take operated as a sole proprietor, reported on Schedule C (Form 1040). He used 350 square feet of his 2.100-square-foot rented loft exclusively and business. Drake used the cash accounting method and had the following income and expenses for his financial planning business- • Gross receipts: $36,960 • Expenses: Advertising: $80 Business insurance: $685 - Business license: $100 Comprehensive health insurance (entire year): $7,788 - Office supplies: $76 Postage: $38 Rent (entire year): $14,400 Renter's insurance (entire year): $1,055 Second phone line, exclusively for business: $103 Tax preparation (allocated to business): $350 • Utilities (entire year): $2.281 Blake closed his business on April 1, 2018. If the office-in-home (OIH) simplified method is elected, what is the amount of Blake's OIH O $1,750 O $1,500 $440 $375 Mark for follow up Question 74 of 75. Mona owns a rental house that she has rented to various tenants since September of 2001. The backyard fence fell into June 27th, 2018 for $8,399. If Mona elects to use special depreciation for the new fence, what is the amount of current I donreciation) for this asset?

Answer 1

ANSWER : (B) $ 1500

This is because in home office exclusively method, you simply able to deduct either $5 for every square foot of your home

office or the deduction is capped at $ 1500 per year. in this case blake uses 350 square foot exclusive for business. Therefore

$5 * 350 = $ 1750

or

$1500

whichever is lower.