Marcella is a sole proprietor and wishes to use the actual m

Marcella is a sole proprietor and wishes to use the actual method for business use of Home expenses her mortgage interest in 2016 is $4,392 and real estate taxes are $1,278 her home office is 400 square feet and her total home square footage is 2000 square ft what is the home office expense deduction without any other qualified expenses including depreciation

Solution

Given that,

Mortgage Interest for 2016 = $4392

Real Estate Tax = $1278

Total Deduction = Mortgage interest + Real Estate Tax

= $4392 + $1278

= $5670

% of Area use = 400 sq. / 2000 sq. = 20% or 0.20

Home Offce Expense Deduction = Total Deduction * % of Area use

= $5670 * 0.20

= $1134