Answer Happy

16 Part 2 of 2 0.45 points [The following information applies to the questions displayed below.) Rita owns a sole proprietorship in which she works as a management consultant. She maintains an office in her home (500 square feet) where she meets with clients, prepares bills, and performs other work-related tasks. Her business expenses, other than home office expenses, total $5,740. The following home-related expenses have been allocated to her home office under the actual expense method for calculating home office expenses. $ 1,670 Real property taxes Interest on home mortgage Operating expenses of home Depreciation 5,205 835 1,642 Also, assume that, not counting the sole proprietorship, Rita's AGI is $61,400. Rita itemizes deductions, and her itemized deduction for non-home business taxes is less than $10,000 by more than the real property taxes allocated to business use of the home. Assume Rita's consulting business generated $15,350 in gross income. (Leave no answer blank. Enter zero if applicable.) Problem 14-64 Part b (Algo) b. What would Rita's home office deduction be if her business generated $10,350 of gross income instead of $15,350? (Answer for both the actual expense method and the simplified method.) Answer is complete but not entirely correct. $ 1,500 X $ 8,375 X Actual expense method Simplified method