1. Brandy has her company business office in her home and qualifies for a home office deduction. The office is 400 square feet out of the house total of 2000 square feet. The mortgage interest and taxes associated with the entire house are $1,600. Other expenses allocable to just the office total $300. Finally, Brandy bought and used business supplies costing $200. During the year, Brandy made gross sales of $3,400. Without considering depreciation, what is the maximum allowable Home Office deduction she can claim? (Show your work as I award partial credit)

2.

John is the sole owner of Green River Company. During the year, he bought a car for his personal and business use. In total, he drove it 14,210 miles for business and 18,450 overall. During the year, he spent the following total expenses on the car:

a. Fuel $2,956

b. Oil changes $230

c. New tires $460

d. Repairs $410

e. Insurance $975

f. Car washes $125

He paid $25,000 for the car when he bought it in February. The total depreciation allowable, assuming 100% business use, was $4,100. In addition to the above expenses, John paid $455 for parking, ferry, and toll charges. Determine the largest deduction that John is entitled to. Again, be sure to show ALL your work for credit.