John represents several national casualty insurance companies on a contract basis. He is paid a retainer and receives additional compensation if the...

John represents several national casualty insurance companies on a contract basis. He is paid a retainer and receives additional compensation if the claims for the year exceed a specified number. As an independent contractor, he is responsible for whatever expenses he incurs. Karl works out of an office near his home. The office is located at 1202 Brentwood Avenue. He shares Suite 326 with a financial consultant, and operating expenses are divided equally between them. The suite has a common waiting room with a receptionist furnished and paid by the landlord. Karl’s one-half share of the 2011 expenses he paid is listed below.

Office rent

$11,600

Utilities (includes telephone and fax)

4,300

Replacement of waiting room furniture on April 22

3,600

Renters’ insurance (covers personal liability, casualty, and theft)

1,400

Office expense (supplies and postage meter)

740

New Toshiba copier (less trade-in on old machine) on February 7

300

Waiting room coffee service (catered)

280

Waiting room magazine subscriptions

90

For his own business use, Karl purchased a laptop computer for $2,100 on June 17 and a Nikon camera for $1,200 on February 5. Except for his vehicle (see item 2), John uses the § 179 write-offoption whenever possible.