1. Marcela is a sole proprietor and wishes to use the actual method for business use of home expenses. Her mortgage interest for 2016 is $4,392, and real estate taxes are $1,278. Her home office is 400 square feet, and her total home square footage is 2,000 square feet. What is the home office expense deduction without any other qualified expense, including depreciation?

a) $5,670

b) $2,000

c) $1,500

d) $1,134

2. A sole proprietor with a tentative loss may deduct which of the following for qualified business-use-of-home expenses?

A) Depreciation.

B) Mortgage interest.

C) Rent.

D) Utilities.