Brooke owns a sole proprietorship in which she works as a management consultant. She maintains an office in her home where she meets with clients, prepares bills, and performs other work-related tasks. The home office is 300 square feet and the entire house is 4,500 square feet. Brooke incurred the following home-related expenses during the year. Unless indicated otherwise, assume Brooke uses the actual expense method to compute home office expenses.
Real property taxes $ 3,600
Interest on home mortgage 14,000
Operating expenses of home 5,000
Depreciation 12,000
Repairs to home theater room 1,000
Assume Brook's consulting business generated $50,000 in gross income for the current year.
a. What is the Brooke's home office deduction for the current year?
b. What is Brooke's AGI for the year?
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