Final Exam > Results Page
final exam score:
80%
Question 1
Correct
Sergio Lopez is the office manager for a large law firm. In 2012, his W-2 income from the law firm was $115,000. The firm provides him with an office. Sergio’s job requires a significant amount of administrative work after normal working hours. Instead of staying late at work to catch up on paperwork, Sergio prefers to take his work home with him. In that endeavor, Sergio has a home office that he uses exclusively and regularly for office work. In 2012, Sergio’s allocated portion of home office expenses for electricity, gas, real estate taxes, and mortgage interest totaled $3,500. On his 2012 income tax return, the amount Sergio can deduct for home office expenses as a miscellaneous itemized deduction is:
(You Answered) (Correct Answer) $0
$1,400
$2,100
$3,500
Question 2
Correct
Cliff Dexter operates a business from home, and 20% of the home qualifies as a home office. Cliff has the following information for 2012: \r\rGross business income $30,000 \rTotal utilities, insurance, and maintenance 8,000 \rDepreciation on the home 12,000 \rTotal real estate taxes and home mortgage interest 21,000 \rBusiness supplies and other non-home-office expenses 14,000 \r\r\rWhat is Cliff’s total home office deduction for 2012?
$11,000
$16,000
(You Answered) (Correct Answer) $8,200
$5,800
Question 3
Correct
Sandy Shelton operates a day care center from her home. She uses 3 of the 8 rooms for her day care business. The 8 rooms are of approximately equal size. During 2012, she operates the day care facility 7 hours a day, 5 days a week, for 50 weeks of the year. What is Sandy’s home business percentage for purposes of deducting her homeowner’s insurance?
12.24%
(You Answered) (Correct Answer) 7.47%
37.5%
19.92%
Question 4
Incorrect
Generally, office-in-home expenses would include all of the following except:
Home repairs
(Correct Answer) Depreciation of a computer used in the home office
(You Answered) Pest control service
Painting the home office
Question 5
Incorrect
On July 1, 2009, Ann Wright, an attorney, began to use one room in her house regularly and exclusively to meet clients. The room is 18% of the square footage of her home. Ann bought the home in 2006 for $135,000. Of this amount, $25,000 was allocated to the land. The fair market value of the home on June 1, 2009, was $125,000 (of which $25,000 is allocated to the land). What is the amount of depreciation (without any consideration of any home office limitations) that can be deducted for the house in 2012?
(Correct Answer) $462
$577
(You Answered) $623
$508
Question 6
Correct
Theresa Edwards sells wallpaper out of her home and uses a separately identifiable portion of her attached garage regularly and exclusively for the storage of product samples and inventory used in her business. The portion of the attached garage used by Theresa in her business is 4% of the total residence. Theresa can take a 4% deduction for all of the following indirect expenses relative to the storage of product samples and inventory, except:
Depreciation on the home
Homeowners’ insurance
(You Answered) (Correct Answer) Water expenses
Real estate taxes
Question 7
Correct
Cindy Fitch is a university professor who operates a marketing consulting business in her home. Cindy’s home office is her principal place of business. The square footage of Cindy’s home is 2,200 square feet. Her home office is 225 square feet. For 2012, gross business income is $45,000. Expenses of the business unrelated to the home office are $28,000. Cindy also had the following household expenses for the year. \r\rReal estate taxes $ 2,600 \rMortgage interest 7,700 \rHomeowner’s insurance 1,000 \rUtilities 4,500 \rDepreciation 5,000 \r\rWhat is Cindy’s net profit or loss for 2012?
$15,384
(You Answered) (Correct Answer) $14,873
$10,384
$0
Question 8
Correct
Carl Murphy is employed as a bus driver. His salary in 2012 is $35,000. Carl is also self-employed and operates a business from his home. In 2012, Carl’s taxable income from his business, without taking into account any Section 179 deduction, is $1,500. In 2012, Carl purchased office furniture and equipment for his home office that totaled $2,500. What is Carl’s maximum Section 179 expense deduction in 2012 for the office furniture and equipment?
(You Answered) (Correct Answer) $2,500
$1,500
$1,250
$0
Question 9
Correct
Ralph Leslie is a self-employed carpenter who uses a small barn located behind his home as his workshop, where he makes cabinets and other items for his customers. Ralph’s workshop is his principal place of business. Ralph’s workshop does not have a separate electric meter. His electricity for the workshop is included in his home utility bill. During 2012, Ralph paid $4,500 for electricity. Based upon the square footage of his home, Ralph would allocate 15% of his home’s indirect expenses for his business. However, Ralph can show that his business use of electricity is 30% of his electricity bill. For 2012, how much can Ralph deduct for his business usage of electricity?
$2,250
$4,500
$675
(You Answered) (Correct Answer) $1,350
Question 10
Correct
Andy Wang is a self-employed architect. He has a business office in the city and in his home. Andy qualifies to take a home office deduction for the office in his home. For 2012, Andy’s gross income from his architecture business was $125,000 ($105,000 earned from his city business office and $20,000 earned from his home office). In the same year he incurred $22,000 of allocated home office expenses (including $4,000 of allocated mortgage interest and real estate taxes). In 2012, what is the total amount of gross income that Andy can use to calculate his office-in-home deduction?
$22,000
(You Answered) (Correct Answer) $20,000
$16,000
$125,000