Mark Pari is a self-employed electrician who exclusively uses a room in his home to perform the administrative functions related to his business. The room is 250 square feet of the 2,500 total square feet of his home. Mark's income from his business before considering the cost of his home office is $62,890. He incurs the following expenses related to his home:
Mortgage interest.................................... $10,000
Property taxes........................................ 1,500
Insurance.............................................. 600
Gas and electric...................................... 1,800
Repairs and maintenance........................... 500
Cable television...................................... 350
Phone ($15 per month for a separate phone
number for the office)............................... 420
House cleaning........................................ 1,400
Long-distance phone calls (business-related)...... 670
Kitchen renovations.................................... 4,700
Assume that die home is worth $200,000. Mark's basis is 140,000, the value of die land is 20% of basis, and the applicable depreciation percentage is 2.564%. Complete form 8829 using the above information. Mark's Social Security number is 136-42-5677. Forms and instructions can be downloaded from die IRS Web site (www.irs.gov).