Cindy operates a computerized engineering drawing business from her home.
Cindy maintains a home office and properly allocates the following expenses to her office:
Depreciation.............. $1,500
Utilities................ 500
Real estate taxes............ 325
Mortgage interest (100 percent deductible)... 500
a. Assume that Cindy earns income of $2,400 from her business for the year before deducting home office expenses. She has no other expenses associated with the business. Calculate Cindy’s deduction for home office expenses. $ ______________________________________
b. Assume that Cindy earns income of $2,600 from her business during the year before deducting home office expenses. Calculate Cindy’s deduction for home office expenses. $ _____________