Question

A sole proprietor with a tentative loss may deduct which of the following for qualified business use of home expenses?

a) Entire loss
b) Half of the loss
c) A percentage of the loss
d) No deduction allowed

Answer 1

A sole proprietor can deduct a percentage of the tentative loss for qualified business use of their home, determined by specific IRS guidelines.

Step-by-step explanation:

A sole proprietor with a tentative loss may deduct a percentage of the loss for qualified business use of home expenses. The actual amount that can be deducted depends on the percentage of the home that is used for business purposes, the limit imposed by the gross income of the business, and whether the expenses exceed the gross income. It's important to note that these rules can be complex, and the IRS provides guidelines for calculating the home office deduction.