Question

In addition to the $14,000 in expenses, in Nov. 2020, Julie’s Tax Prep paid two years’ worth of office rent ($1,000/month * 24 months = $24,000). The rent covers Nov. 1, 2020 through Oct. 31, 2022. How much of the $24,000 rent can Julie’s deduct in 2020?

Answer 1

Answer:

Julie’s can deduct $2,000 in 2020

Explanation:

In 2020 rents for only two months November 2020 and December 2020 are accrued

First calculate the monthly rent

Monthly rent = Rent paid / Month for which rent paid = $24,000 / 24 months = $1,000 per months

Now calculate the rent deduction to be made by Julie in 2020

Rent deduction 2020 = Numbers of months accrued in 2020 x Monthly rent = 2 months x $1,000 per month = $2,000