Description
Hello, I need help with completing this project. Detailed instructions attached. Please be sure to follow them and answer appropriately especially the *RUBIC Guidelines (important*). Please provide in citation and a reference list or a website link (i.e. website, authors, etc.) at the end of the paper.
Thank you.
Unformatted Attachment Preview
Purchase answer to see full attachment
Explanation & Answer
Attached. Please let me know if you have any questions or need revisions.
Client Letter
Your Name
Address
Date
Nora
Address
Dear Nora,
Thank you for contacting us seeking advice concerning your home office deductions. I am
glad to let you know that you qualify for home office deductions.
My understanding of the facts is as follows. You own and operate CC bakery. You use a
home office for administrative duties like paying bills and ordering supplies. The home office
is 300 square feet in a house of 2000 square feet.
My research has discovered that to qualify for a home office deduction you have to pass
various tests as follows. The exclusive use test to determine if you qualify for the home
deductions. This requires you to use a specific place in your house for the business. Under
this test, you qualify for deduction since you use an identifiable space in your home to
conduct business.
You must pass the regular use test requirements. This test requires you to use the area
regularly. The other test is the business use test. Under this test, you must use the space in
your home to conduct business. The activities you carry out in your home office are
exclusively for your business. You, therefore, qualify under this test. Finally, the place must
be your principal place of business. To qualify for this test, you must use the space frequently
and exclusively for the administrative activities of your business. You should also not have
another fixed location where you carry out substantial administrative activities. You,
therefore, qualify under this test.
Your home office deductions can be calculated using the simplified method or the actual
expense method. Under the simplified method, the area in your home that qualifies as a home
office is multiplied by a prescribed rate of $5. The IRS p587 limits an area used for business
in the house t...