Fran Is a CPA Who Has a Small Tax Practice

question 116

Multiple Choice

Fran is a CPA who has a small tax practice in addition to working as the controller for a local manufacturing business. Fran runs her tax practice out of a 150 square foot office in her home where she meets clients and works on their tax returns and researches their tax issues. She meets the exclusive use test for this space. The gross income from her tax practice amounts to $7,500 for the year. Business expenses amount to $1,000. Based on square footage, $4,000 of Fran's mortgage interest and real estate taxes are allocable to the home office. The allocable portion of maintenance, utilities, and depreciation is $4,500. Assuming no other expenses related to the business were incurred, what amount of the maintenance, utilities, and depreciation is deductible by Fran?

• A) $0.
• B) $2,500.
• C) $3,500.
• D) $4,500.
• E) None of the above.

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Definitions:

Personality Characteristics

Traits and qualities that define an individual's distinctive patterns of thinking, feeling, and behaving.

Real and Ideal Self

Concepts in psychology referring to the person one actually is (real self) and the person one desires to become (ideal self).

Unconditional Positive Regard

A practice in person-centered therapy where the therapist offers the client total acceptance and support, regardless of what the client says or does.

Superego

In psychoanalytic theory, the component of the mind that represents internalized societal standards of right and wrong.