Richard operates a hair styling boutique out of his home. The boutique occupies 420 of the home’s 1,200 square feet of floor space. Other information is as follows:
Gross income from the boutique
$10,000
Supplies for the boutique
$2,400
Depreciation on total residence
$12,000
Utilities for total residence
$6,000
What amount of income or loss from the boutique should Richard show on his return?
A. $0 income or loss
B. $10,400 loss
C. $3,500 income
D. $1,300 income
E. None of the above
Answer: D
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