Under the Regular (Actual Expense) Method, the Portion of the Office

question 15

True/False

Under the regular (actual expense) method, the portion of the office in the home deduction that exceeds the income from the business can be carried over to future years.

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Definitions:

Accumulated Depreciation

A cumulative account that records the depreciation expense of an asset, reducing its book value over time.

Initial Cost

The original acquisition cost of an asset or investment, prior to any adjustments for depreciation, improvement, or amortization.

Fixed Asset

A Fixed Asset is a long-term tangible piece of property that a company owns and uses in its operations to generate income, and not expected to be consumed or converted into cash within a year.

Straight-Line Depreciation

A plan to allocate the price of a concrete asset in consistent yearly fractions over its lifespan.