Hector runs a business out of his home. He uses 500 square feet of his home exclusively for the business. His home is 2,500 square feet in total. Hector had $36,000 of business revenue and $32,000 of direct business expenses from his business. The expenses related to his home are Mortgage interest $12,400; Real estate taxes $1,800; Repairs $3,200; utilities $2,600; and insurance $650. Additionally Hector allocates depreciation of $1,750 to the business use portion of his home.

What is Hectors net income from his business and the amount of expenses carried over to the following year, if any?

\begin{tabular}{|l|l|} \hline Net income & Carryover \\ \hline$0 & $1800 \\ \hline$0 & $0 \\ \hline$4,000 & $5,800 \\ \hline$36,000 & $0 \\ \hline \end{tabular} None of the above. The answer is $ and $