$26.$ Kathy is a self employed taxpayer working exclusively from her home office. Before the home office deduction, Kathy has $$3,000$ of net income. Her allocable home office expenses are $$5,000$ in total $($includes $$2,000$ of allocated interest and property taxes$).$ How are the home office expenses treated on her current year tax return

a$.$ All home office expenses may be deducted, resulting in a business loss of $$2,000.$

b$.$ Only $$3,000$ of home office expenses may be deducted, resulting in net business income of zero. None of the extra $$2,000$ of home office expenses may be carried forward or deducted.

c$.$ Only $$3,000$ of home office expenses may be deducted, resulting in net business income of zero. The extra $$2,000$ of home office expenses may be carried forward and deducted in a future year against home office income.

d$.$ None of the home office expenses may be deducted since Kathy$$s income is too low.