Alex is a self-employed dentist who operates a qualifying office in his home. Alex has $180,000 gross income from his practice and $160,000 of expenses directly related to the business, i.e., non-home office expenses. Alex's allocable home office expenses for mortgage interest expenses and property taxes are $14,000 and other home office expenses are $9,000. What is Alex's total allowable home
office deduction?
A) $9,000
B) $14,000
C) $20,000
D) $23,000
C) $20,000
Expenses directly related to the business are all deducted before other (indirect) home office expenses. The other home office expenses are then deductible only if there is still net income ($180,000 - $160,000 = $20,000) from the business after the first expenses are deducted.
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