Nancy is a self-employed consultant who uses 10% of her residence as an office. The office is used exclusively for business and is frequented by customers on a regular basis. Nancy also uses her den as an office ( 10% of the total floor space of her home) to prepare bills and keep records. However, the den is also used by her children as a TV room. In 2017, Nancy's net income from the consulting business (other than her home office expenses) amounts to $40,000 in 2017. She also incurs $1,400 of expenses directly related co the office (e.g., painting of the office, window blinds). Nancy incurs the following expenses in 2017 related to her residence:

Real estate taxes ..................................... $ 2,000
Mortgage interest ...................................... 5,000
Insurance ....................................................... 500
Depreciation ............................................... 3,500
Repairs and utilities .................................. 1,000
Total ........................................................ $12,000

a. Which of the expenditures above (if any) are deductible for 2017? Are they for AGI or from AGI deductions? How would your answers change if the tax year were 2018 rather than 2017?

b. Would your ans,ver to Part a change if Nancy's net income from consulting were only $2,500 for the yea r? What is the amount of the office-in-home deduction and the amount of the carryover (if any) of the unused deductions?