Gene is a self-employed taxpayer working from his home. His net income is $7,000 before home office expenses. His allocable home office expenses are $8,000 in total. How are the home office expenses treated on his current year tax return?

a. All home office expenses can be deducted and will result in a $1,000 business loss.
b. Only $7,000 of the office expenses can be deducted, the remaining $1,000 cannot be carried forward or deducted.
c. None of the home office expenses can be deducted because Gene's income is too high.
d. Only $7,000 of the office expenses can be deducted; the remaining $1,000 can be carried forward to future tax years.


d

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What will be an ideal response?

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