3. Rob has a full-time job as an electrical engineer for the city utility. In his spare time, Rob repairs electronic gear in the basement of his personal residence. Most of his business comes from friends and referrals from former customers, although occasionally he runs an ad in the local suburbia newspaper. Typically, the items are dropped off at Rob's house and later picked up by the owner when notified that the repairs have been made The floor space of Rob's residence is 2,500 square feet, and he estimates that 20% of this is devoted exclusively to the repair business (i.e., 500 square feet). Gross income from the business is S13,000, while expenses (other than home office) are S5,000. Expenses relating to the residence are as follows: Real property taxes $4,500 Interest on home mortgage Operating expenses of residence Depreciation (based on 20% business use) 1,000 What is Rob's net income from the repair business if he uses the regular (actual expense) method 8,000 3,000