2. Farah has come to you for tax advice on her home office. She is self-employed and has a home office. The total square footage of her home is 2,500. The square footage of his office is 400. She has provided the following information as well.

General Info Sales Revenue $100,000

COGS $35,000

Advertising $2,000

Home Office Info Mortgage Interest $8,000

Insurance $3,000

Property Taxes $6,000

Utilities $2,500

Depreciation (whole house) $10,000

a. Based on the above information what is Farahs home office deduction for the current year using the regular method? Show all work

b. Based on the above information what is Farahs home office deduction for the current year using the simplified method? Show all work

c. What information should Farah be advised regarding the deduction? Include in your answer the requirements for taking a home office deduction and your recommendation for which method she should use.