LO7 Charlotte owns a custom publishing business. She uses 500 square feet of her home (2,000 square feet) as an office and for storage. All her business has come from telemarketing (telephone sales), direct mailings, or referrals. In her first year of operation, she has revenues of $37,000, cost of goods sold of $25,900, and other business expenses of $8,100. The total expenses related to her home are:

What amount can Charlotte deduct for her home office?

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Home mortgage interest $6,400 Real property taxes 2,100 Insurance 560 Utilities 800 Repairs and maintenance 600 House cleaning 960 Depreciation (unallocated) 5,000