Problem: Rosa's Home Office [Learn more in Chapter 10]. As stated earlier, Rosa creates her paintings at home. Her studio occupies 1,000 square feet of the 4,000 square-foot living area in the Nava home. The Navas built the home at a cost of $350,000 on a lot previously acquired for $100,000, and they moved in on June 15, 2020. The current FMV of the home is $520,000 [with $400,000 allocated to the home and $120,000 allocated to the lot]. In addition to the mortgage interest and property taxes (listed below with other 2023 expenditures), other 2023 expenditures related to the residence are summarized below:
Utilities $4,200
Molly Maid cleaning service 2,800
Service fee for home security system 1,600
Removal of stains from studio flooring 1,100
Homeowner's insurance 970
Repairs to studio skylight 340