$51.$ Nancy is a self$-$employed consultant who uses $10\%$ of her residence as

an office. The office is used exclusively for business and is frequented by customers on a

regular basis. Nancy also uses her den as an office $(12\%$ of the total floor space of her

home$)$ to prepare bills and keep records. However, the den is also used by her children

as a TV room. In $2023,$ Nancy$$s net income from the consulting business $($other than her

home office expenses$)$ amounts to $$40,000$ in $2023.$ She also incurs $$1,400$ of expenses

directly related to the office $($e$.$g$.,$ painting of the office, window blinds$).$ Nancy incurs the

following expenses in $2023$ related to her residence:

Real estate taxes $ $2,000$

Mortgage interest $5,000$

Insurance $500$

Depreciation $3,500$

Repairs and utilities $1,000$

Total $$12,000$

a$.$ Which of the expenditures above $($if any$)$ are deductible for $2023?$ Are they for AGI or

from AGI deductions?

b$.$ Would your answer to Part a change if Nancy$$s net income from consulting were only

$$2,500$ for the year?