Answer:
Mr. C
Home office deduction for the year is:
= $20,405.50
Explanation:
Qualifying home office expenses:
Home mortgage interest $12,980
Property tax on residence 2,200
Homeowner’s insurance 1,475
Utilities 2,100
Furnace repairs 300
Depreciation on building 185,000
Qualified home expenses $204,055
10% for home office = $20,405.50
b) Mr. C is entitled to deduct home office expenses relating to mortgage interest, insurance, utilities, repairs, and depreciation, including furnace repairs. The deductions for a home office are based on the percentage of Mr. C's home devoted to his business use.
