Designate whether the following expenses are fully deductible (F), partially deductible (P), or nondeductible (N) in the year paid.
-Mortgage interest and taxes on the home in which a sole proprietor has a home office. Gross profit from the business is only $1,500.

Question

Quizplus · Accepted Answer

Mortgage interest and taxes on a home are generally fully deductible expenses when itemizing deductions on a tax return. When a portion of the home is used for business purposes, such as a home office by a sole proprietor, these expenses can be apportioned between personal and business use. The business portion is fully deductible against the business income, while the personal portion remains fully deductible on Schedule A (if itemizing). The gross profit of the business does not affect the deductibility of these expenses.

Designate Whether the Following Expenses Are Fully Deductible (F), Partially