Blake operated as a sole proprietor, reported on Schedule C form 1040. He used 350 square feet of his 2,100 sq ft rented Loft exclusively and regularly for business. Blake used the cash accounting method and had the following income and expenses for his Financial Planning business:
gross receipts $36,960
expenses
advertising $80
business insurance $685
business license $100
comprehensive life insurance entire year $7,788
office supplies $76
postage $38
rent entire year $14,400
renters insurance entire year $1,055
second phone line exclusively for business $103
tax preparation allocated to business $350 utilities entire year $2,281.
Blake closed his business on April 1st 2018. He had no carryover losses and all assets were fully depreciated.

1.- If Blake elects to use actual office in home expenses, what is the amount of his deduction? 648 739 2,576 2,957

2.- If Blake elects to use the office-in-home simplified method, What is the amount of his schedule C net profit or loss 34,515 34,818 35,153,

37,674.

 

Explain