A taxpayer has $4,000 in not-for-profit income after the IRS has determined that there is not a profit motive on his business. They have given him the opportunity to correct the return. He has expenses in the following categories; $6,500 in mortgage interest and real property taxes and office use of 10% of his home, $750 in supplies, $6,750 in home utilities, $500 in advertising, $850 in contract labor costs, and $2,000 in depreciation. What is the tax treatment this activity generates on his return? Loss of $13,350 O Income of $4,000, with deductions totaling $4,000 against this income. O Loss of $1,425 Income of $4,000, with no deductions