Howard, a self-employed consultant, uses one room in his home exclusively and regularly for his home office.This office space constitutes 15 percent of the floor space of his home. Howard’s wife works at a bank and is paid an annual salary of

$80,000. Howard has gross income from his business of $10,000. Expenses of his business (other than home office expenses) are $7,900. Howard has the following home-use expenses:

Total mortgage interest on the home $8,000 Total real property taxes on the home 3,000 Utility bills for the home 2,000 Depreciation (only for the 15% used as an office) 400 How much of these home-use expenses can Howard deduct as home office expenses?

a. $13,400

b. $10,000

c. $2,350

d. $2,100 AppendixLO1