In which of the following independent situations is the taxpayer entitled to deduct expenses related to the home office? I. II. A real estate agent employed by a local real estate agency owns several rental properties. She regularly and exclusively uses a second bedroom in her home solely as an office for bookkeeping and other activities related to management of the rental properties. She has no other place to perform these functions. An attorney employed by a large law firm frequently brings work home from the office. She uses a study in her home for doing this work as well as managing her investment portfolio.
A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements are correct.
D) Neither statement is correct.

Question

Quizplus · Accepted Answer

The real estate agent in statement I can deduct home office expenses because she uses the space exclusively and regularly for business purposes related to her rental properties, and has no other place to perform these functions. The attorney in statement II cannot deduct home office expenses because the space is not used exclusively for business purposes, as it is also used for managing her investment portfolio.

In Which of the Following Independent Situations Is the Taxpayer