Question

Which of the following statements regarding limitations on the deductibility of home office expenses of employees is correct? (Multiple Choice)

a) Unreimbursed home office expenses of employees are not deductible.

b) Unreimbursed home office expenses of employees are deductible as itemized deductions.

c) Unreimbursed home office expenses of employees are "for AGI" deductions limited to gross income from the business.

d) Unreimbursed home office expenses of employees are "for AGI" deductions not limited to gross income from the business.

Answer 1

Option c is the correct answer. Unreimbursed home office expenses of employees are 'for AGI' deductions limited to gross income from the business.

Step-by-step explanation:

The correct statement regarding limitations on the deductibility of home office expenses of employees is option c) Unreimbursed home office expenses of employees are 'for AGI' deductions limited to gross income from the business.

This means that employees can deduct their home office expenses but the deduction is limited to their gross income from the business.

For example, if an employee earns $50,000 from their business and incurs $10,000 in home office expenses, they can only deduct up to $50,000 as 'for AGI' deductions.