I understand what you're saying, and it makes sense... from an IRS perspective, I think they'd allow only the smaller amount. That's just my thinking, and if you look at various IRS pubs I don't think you'll find a satisfying answer, one way or the other. I think your risk in reporting the higher amount would be minimal, as long as there's nothing really hinky about your Schedule C or Home Office Expenses. On a (sorta) unrelated subject -- are you claiming the energy credit for the solar panels, assuming you're eligible?
