Dighi, an artist, uses a room in his home (250 square feet) as a studio exclusively to paint. The studio meets the requirements for a home office deduction. (Painting is considered his trade or business.) The following information appears in Dighi's records: Expenses related to home office: (a) What is the amount of Dighi's home office deduction if he is self-employed?
(b) If some amount is not allowed under the tax law, how is the disallowed amount treated?
(c) Assume all of Dighi's records of expenses relating to the room were destroyed in a major paint spill. How much of a home office deduction, if any, will he be allowed?

Question

Dighi, an artist, uses a room in his home (250 square feet) as a studio exclusively to paint. The studio meets the requirements for a home office deduction. (Painting is considered his trade or business.) The following information appears in Dighi's records:  Expenses related to home office:  (a) What is the amount of Dighi's home office deduction if he is self-employed?
(b) If some amount is not allowed under the tax law, how is the disallowed amount treated?
(c) Assume all of Dighi's records of expenses relating to the room were destroyed in a major paint spill. How much of a home office deduction, if any, will he be allowed?

Quizplus · Accepted Answer

The Answer of Dighi, an artist, uses a room in his home (250 square feet) as a studio exclusively to paint. The studio meets the requirements for a home office deduction. (Painting is considered his trade or business.) The following information appears in Dighi's records:  Expenses related to home office:  (a) What is the amount of Dighi's home office deduction if he is self-employed?
(b) If some amount is not allowed under the tax law, how is the disallowed amount treated?
(c) Assume all of Dighi's records of expenses relating to the room were destroyed in a major paint spill. How much of a home office deduction, if any, will he be allowed?

Dighi, an Artist, Uses a Room in His Home (250