Dighi,an Artist,uses a Room in His Home (250 Square Feet)as

question 39

Essay

Dighi,an artist,uses a room in his home (250 square feet)as a studio exclusively to paint. The studio meets the requirements for a home office deduction.(Painting is considered his trade or business.)The following information appears in Dighi's records:
Expenses related to home office:
(a)What is the amount of Dighi's home office deduction if he is self-employed?
(b)If some amount is not allowed under the tax law,how is the disallowed amount treated?
(c)Assume all of Dighi's records of expenses relating to the room were destroyed in a major paint spill. How much of a home office deduction,if any,will he be allowed?

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Definitions:

Normality

In statistics, a property describing data sets whose distribution bell-shaped and symmetric about the mean, following the normal distribution pattern.

Multicollinearity

Multicollinearity occurs when independent variables in a regression model are highly correlated, potentially distorting the model's predictions.

Variance Inflation Factor

A metric that quantifies the severity of multicollinearity in regression analysis.

Correlation Matrix

A table showing the correlation coefficients between variables, indicating the level and direction of the relationship between them.