Question

Melanie is employed full-time as an accountant for a national hardware chain. She also has recently started 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 for 2018 are as follows:

Real property taxes	$6,000
Interest on home mortgage	7,200
Operating expenses of home	1,500

Melanie's residence cost $400,000 (excluding land) and has living space of 2,000 square feet, of which 27% (540 square feet) is devoted to business. The office was placed in service in February 2017, and under the Regular Method, Melanie had an unused office in the home deduction of $700 for 2017. Assume there is sufficient net income from her consulting practice.

What is Melanie's office in the home deduction under the Regular Method. Round your final answer to nearest dollar.

**SHOW WORK AND EXPLAIN**

Answer 1

Particulars	Amount($)
Real property tax	6000*27% = 1620
Add:Interest on home mortgagae	7200*27% = 1944
Operating expenses	1500*27% = 405
Allocated depreciations	400000*27%*0.2564 = 27691.2
Home deduction under regular method	4807
In addition to the$4807 mealine can cliam the deduction from prior period
Melaine can claim an office in the home expenses(4807+700 ) = 5507
Because melaine is self employed as to her consulting activity the exp are
Deduction fro AGI
The real property taxes and interest not claimed 6000-700 = 5300
Qualify as itemmised deduc tions from AG 7200-1944= 5256

answered by: anonymous