Colin, a self-employed consultant, uses a room of his home as a business office. This room represents 10 percent of the home's square footage. This year, Colin incurred the following expenses in connection with his home: Home mortgage interest $13,680 Property tax on residence 2,900 Homeowner's insurance 2,080 Utilities 2,800 Furnace repairs 370 Colin purchased the home in 2000 for $238,000. For MACRS depreciation purposes, he allocated $183,300 to the building and $54,700 to the land. Use Table 7.4. a. If Colin's gross business income exceeded his operating expenses by $82,000, compute his net profit for the year. b. If Colin's gross business income exceeded his operating expenses by $2,500, compute his net prot for the year. TABLE 7.4 MACRS for Nonresidential Real Property (39-year property) Month Placed in Service Year 1 2 3 4 5 6 7 8 9 10 11 12 Depreciation Rate 1 2.461% 2.247% 2.033% 1.819% 1.605% 1.391% 1.177% 0.963% 0.749% 0.535% 0.321% 0.107% 2-39 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 40 0.107 0.321 0.535 0.749 0.963 1.177 1.391 1.605 1.819 2.033 2.247 2.461