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Jake runs a business out of his home. He uses 600 square feet of his home exclusively for the business. His home is 2,400 square
Jake runs a business out of his home. He uses 600 square feet of his home exclusively for the business. His home is 2,400 square feet in total. Jake had $27,000 of business revenue and $22,000 of business expenses from his home-based business. The following expenses relate to his home:
Mortgage interest | $ | 10,800 |
Real estate taxes | 1,600 | |
Utilities | 2,400 | |
Insurance | 600 | |
Repairs | 2,400 | |
Depreciation (on business use portion of home) | 1,200 | |
What is Jakes net income from his business? What amount of expenses is carried over to the following year, if any?
Multiple Choice
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($14,000) and $0 carryover
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($650) and $0 carryover
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$0 and $650 carryover
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$550 and $0 carryover
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