Maureen operates a cosmetic sales business from her home. She uses 400 of 1,600 square feet of the home as an office for the entire year. Her income before her home office deduction is $3,400 and unapportioned expenses for the home are as follows:
Mortgage interest...............................$5,000
Property taxes......................................1,400
Utilities............................................1,200
Repairs and maintenance........................600
Depreciation for the entire house...........6,000
a. How much can Maureen deduct for her home office if she uses the actual expense method?
b. How much can Maureen deduct for her home office if she uses the simplified method?
c. If any of the expenses are not deductible currently, how are they treated for tax purposes?