Case Study Question

Based on the information provided in the case scenario for Ron and Sandy Peterson, which of the following statements regarding Sandy's home office deduction is correct?

A$)$

The amount Sandy may deduct this year for qualifying home office expenses is unlimited.

B$)$

Sandy may only deduct her qualifying home office expenses as a miscellaneous itemized deduction.

C$)$

Sandy may deduct her qualifying home office expenses when calculating adjusted gross income $($AGI$).$

D$)$

Sandy is not eligible to deduct her home office expenses.

A$)$

Negligence is a failure to make a reasonable attempt to comply with provisions of the Internal Revenue Code.

B$)$

Negligence is intentional conduct by a taxpayer to avoid paying income tax.

C$)$

Negligence is bad faith conduct by a taxpayer who has intent to evade paying income tax.

D$)$

Negligence is an intentional disregard of the provisions of the Internal Revenue Code that results in a substantial underpayment.