Which of the Following Statements Regarding Limitations on the Deductibility

question 56

Multiple Choice

Which of the following statements regarding limitations on the deductibility of home office expenses of self-employed taxpayers is correct?

• A) Deductible home office expenses are for AGI deductions and may be deducted without limitation.
• B) Deductible home office expenses are miscellaneous itemized deductions not subject to the 2 percent floor.
• C) Deductible home office expenses are for AGI deductions limited to (gross income from the business minus non-home office related expenses).
• D) Deductible home office expenses are miscellaneous itemized deductions subject to the 2 percent of AGI floor.

---

Definitions:

Denial

Psychological defense mechanism in which the person refuses to acknowledge or recognize a threatening situation.

Psychological Defense Mechanisms

Unconscious distortions of a person’s perception of reality that reduce stress and anxiety.

Ego

In psychoanalytic theory, the part of the personality that mediates between the desires of the id, the values of the super-ego, and the realities of the external world.

Unconscious Efforts

Activities or processes that occur without conscious awareness or control, influencing behaviors and decisions.