Question

In each of the following independent cases, indicate whether the taxpayer will be entitled to deduct expenses (depreciation, utilities, insurance, etc. or $5 per square foot up to 300 square feet) applicable to an "office in the home."

a) Pete is an accounting professor at a state university where he is furnished an office. In his home, one room has been converted into an "office" used by Pete solely for such tasks as grading papers, preparing exams, and reading journals.

b) Marilyn, married, operates a part-time transcription service in her home. In her bedroom, she has an "office" with a desk, computer, printer, file cabinet, etc. She uses the office approximately 15 hours per week in her transcription service. She continues to use the bedroom as a place to sleep and dress.

c) Jane, who is self-employed, is a sales representative for several companies. She uses a room in her home solely as an office in which she takes orders, makes telephone sales calls, prepares reports, and so on. She does not have an office elsewhere.

Answer 1

(a).Pete who is an accountant professor is eligible for the deductions and he doesnt have to pay tax for all those expenses.

As per act, Employees can take home office deduction if they are maintaining it for their convenience.

(b)Marilyn is not eligible for deductions because she runs a services over there. subject to eligibility she have to pay taxes

As per act ,if home office is 300 square feet or less than that so directly its eligible for deduction, then it pays $5 per square feet upto $1500 for 300 square feet

(c) jane have to pay tax as its incurred and she is not eligible for deductions

As per act ,if home office is 300 square feet or less than that so directly its eligible for deduction, then it pays $5 per square feet upto $1500 for 300 square feet