Indicate the answer choice that best completes the statement or answers the question.

1. 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?


All home office expenses can be deducted and will result in a $1,000 business loss.


Only $7,000 of the office expenses can be deducted, the remaining $1,000 cannot be

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