Alfredo Is Self-Employed and He Uses a Room in His

question 8

Essay

Alfredo is self-employed and he uses a room in his home as his principal place of business. He meets clients there and doesn't use the room for any other purpose. The size of his home office is 600 square feet. The size of his entire home is 3,000 square feet. During the current year, Alfredo received $16,900 of gross income from his business activities, and he reports $12,675 of business expenses unrelated to his home office. For his entire home, he reported $14,800 of mortgage interest, $3,600 of property taxes, $3,300 of home operating expenses, and $4,400 of depreciation expense.Alfredo itemizes deductions, and the sum of his itemized deduction for non-home business taxes and the real property taxes allocated to business use of the home is less than $16,900. What amount of home office expenses is Alfredo allowed to deduct in the current year? (Assume he uses the actual expense method of computing home office expenses.)Indicate the amount and type of expenses he must carry over to next year, if any.

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Definitions:

Rival In Consumption

A characteristic of a good whereby its consumption by one person diminishes its availability for another person.

Hersey-Blanchard

A situational leadership model proposing that effective leadership is a combination of adaptive leadership style and the maturity level of those being led.

Situational Leadership Model

A leadership framework that proposes the most effective leadership style depends on the readiness and competency of the followers in various situations.

Selling Style

A method or approach used by sales professionals to engage, persuade, and complete transactions with customers.