K exclusively uses a portion of his bedroom as a place to manage his few investments.He charts his stocks daily.Costs allowable to the home office are $1,000.Gross income from his investments is $800, while his A.G.I., including the investment income, is $30,000.The amount K may deduct from his A.G.I.is

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The deduction for a home office is limited to the gross income generated from the activity that justifies the home office, minus any other expenses related to that income. Since K's gross income from investments is $800, and the allowable home office costs are $1,000, he cannot deduct more than his gross income from the activity, making his deductible amount $0 because the expenses exceed the income generated from the activity.

K Exclusively Uses a Portion of His Bedroom as a Place