In which of the following independent situations is the taxpayer entitled to deduct expenses related to the home office?
I.A real estate agent employed by a local real estate agency owns several rental properties. She regularly and exclusively uses a second bedroom in her home solely as an office for bookkeeping and other activities related to management of the rental properties. She has no other place to perform these functions.
II.An attorney employed by a large law firm frequently brings work home from the office. She uses a study in her home for doing this work as well as managing her investment portfolio.

A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Question

In which of the following independent situations is the taxpayer entitled to deduct expenses related to the home office?
I.A real estate agent employed by a local real estate agency owns several rental properties. She regularly and exclusively uses a second bedroom in her home solely as an office for bookkeeping and other activities related to management of the rental properties. She has no other place to perform these functions.
II.An attorney employed by a large law firm frequently brings work home from the office. She uses a study in her home for doing this work as well as managing her investment portfolio.
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A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Quizplus · Accepted Answer

The real estate agent in statement I is entitled to deduct home office expenses because she uses a specific area of her home regularly and exclusively for business activities related to her rental properties, and she has no other fixed location to manage these activities. The attorney in statement II does not meet the exclusive use test, as the space is used for both work and personal finance management.

In Which of the Following Independent Situations Is the Taxpayer