Eli and Alani Fojam are married and file a joint return. They bought a home 10 years ago for $270,000, and lived in it until they sold it this year for $790,000. Two years after they bought the property they spent $42,000 to completely renovate the bathroom and kitchen. Alani used one small room in the home as a qualified home office for the purpose of running her schedule C business. She used the regular method to calculate her home office deduction and correctly deducted a total of $7,250 depreciation. Six months before they sold the property they paid a contractor $6,500 to enclose the back lanai where the washer and dryer are located. On closing they paid relator commissions of $32,800.