Question

Scenario 1: Michael’s home has two acres with a detached barn. In the barn, Michael fixes cars
he works on for other people. His clients stop by the barn to show him the damage before he
accepts and completes the jobs. During the year, he incurred a number of expenses to operate the
car repair business out of his barn. He did not perform the work for this business at any other
location and does not use the barn for any other purpose except for the car repair business.
A. Can Michael deduct some portion of his barn’s expenses related to his car repair business
this year?
B. Explain in one or two sentences only why you gave the answer to part A using the
research resource you found. Make sure to cite the area of the resource you used.

Answer 1

As per the given information the Michael is doing car repair business and he is doing the business in his barn only and the barn is also used for his business only not for other purposes.

A. So, if Because of Michael car repair business if he spent anything on barn he can deduct in his business income. Alternatively, the Michael can also deduct the amount which would have paid if he takes barn for rent for his car repair business. Alternatively, the amount the Michael forego for not giving rent to others also can take deduction from his business Income.

B. Research resource is: The additional expenses incurred for the buisness

The barn rent payable if he do the business outside

If the Barn is give rent for others