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In: Accounting

Antonio Capellini is a successful self-employed accountant in CANADA. He meets all of his clients in...

Antonio Capellini is a successful self-employed accountant in CANADA. He meets all of his clients in his office in the basement of his home. The office is 800 square feet and the house is 3,000 square feet. Antonio incurred the following costs during the current year:

Business liability insurance                             $ 400

House insurance                                                880

House utilities                                                 2,600

House repairs and maintenance                       3,000

Mortgage interest                                            5,700

Property tax                                                    1,600

Office supplies                                                   760

What is the amount of the expenses deductible from Antonio’s business income?

A.

$1,160
B.

$2,888
C.

$3,675
D.

$4,835

Solutions

Expert Solution

Ans D $4,835
Items Amount Allowed Expense
Business liability insurance $400 $                   400.00 Fully allowed
House insurance          880 $                   234.67 (880 x 800/3000)
House utilities      2,600 $                   693.33 (2600 x 800/3000)
House repairs and maintenance      3,000 $                   800.00 (3000 x 8000/3000)
Mortgage interest      5,700 $               1,520.00 (5700 x 800/3000)
Property tax      1,600 $                   426.67 (1600 x 800/3000)
Office supplies          760 $                   760.00 Fully allowed
Total $                     4,835

ekkarill92 answered 3 years ago
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