Jake runs a business out of his home. He uses 600 square feet of his...
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Accounting
Jake runs a business out of his home. He uses 600 square feet of his home exclusively for the business. His home is 2,400 square feet in total. Jake had $27,000 of business revenue and $22,000 of business expenses from his home-based business. The following expenses relate to his home:
Mortgage interest
$
10,800
Real estate taxes
1,600
Utilities
2,400
Insurance
600
Repairs
2,400
Depreciation (on business use portion of home)
1,200
What is Jakes net income from his business? What amount of expenses is carried over to the following year, if any?
Multiple Choice
($14,000) and $0 carryover
($650) and $0 carryover
$0 and $650 carryover
$550 and $0 carryover
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