Alex is a self-employed dentist who operates a qualifying office in his home. Alex has $180,000 gross income from his practice and $160,000 of expenses directly related to the business, i. e., non-home office expenses. Alex's allocable home office expenses for mortgage interest expenses and property taxes are $14,000 and other home office expenses are $9,000. What is Alex's total allowable home office deduction?

Question

Cullen

Business

31 December, 19:49

Alex is a self-employed dentist who operates a qualifying office in his home. Alex has $180,000 gross income from his practice and $160,000 of expenses directly related to the business, i. e., non-home office expenses. Alex's allocable home office expenses for mortgage interest expenses and property taxes are $14,000 and other home office expenses are $9,000. What is Alex's total allowable home office deduction?

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Answers (1)

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Yair · Answer 1

The correct answer is $20,000.

Explanation:

According to the scenario, the given data are as follows:

Gross income = $180,000

Business expense = $160,000

Mortgage interest and property taxes expense = $14,000

Other home office expense = $9,000

So, we can calculate the total allowable home office deduction by using following method:

As we know, first we have to deduct the business expense from the gross income and than if there any net income left than other expense can be deducted.

Hence,

= Gross income - Business expense

= $180,000 - $160,000

= $20,000