What is the maximum amount mohad is allowed to deduct

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Problem 1: Mohad uses the second floor of his home exclusively as a home office for his unincorporated business and does not have another place of work. The space of the second floor is 1,000 square feet, while the total space of his home is 4,000 square feet. In the current taxation year, his business had $10,000 of income before home office expense and he incurred the following expenses relating to his home: Utilities and repairs $6,000 Home insurance and property taxes $2,000 Mortgage principal payments $30,000 Mortgage interest $20,000 What is the maximum amount Mohad is allowed to deduct from his business income?

a) $1,500

b) $2,000

c) $7,000

d) $14,500

Reference no: EM132669602

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