During the current year, Paul, the vice president of a bank, made gifts in the following amounts:

To Sarah (Paul's personal assistant) at Christmas	$41
To Darryl (a key client)$3 was for gift wrapping	30
To Darryl's wife (a homemaker) on her birthday	12
To Veronica (Paul's boss) at Christmas	50

In addition, on professional assistants' day, Paul takes Sarah to lunch at a cost of $60. Presuming that Paul has adequate substantiation and is not reimbursed, how much can he deduct?

Do not round intermediate computations. If required, round your final answer to the nearest cent. $

Question 2

1. Melanie is employed full-time as an accountant for a national hardware chain. She also has recently started a private consulting practice, which provides tax advice and financial planning to the general public. For this purpose, she maintains an office in her home. Expenses relating to her home for 2020 are as follows:

   Real property taxes	$5,000
   Interest on home mortgage	6,000
   Operating expenses of home	1,250

   Melanie's residence cost $416,500 (excluding land) and has living space of 2,000 square feet, of which 26% (520 square feet) is devoted to business. The office was placed in service in February 2019, and under the Regular Method, Melanie had an unused office in the home deduction of $1,725 for 2019. Assume there is sufficient net income from her consulting practice.

   Click here to access the depreciation table to use for this problem. Round your final answer to nearest dollar.

   a. What amount can Melanie claim this year for her office in the home deduction under the Regular Method? $

   b. What is Melanie's office in the home deduction under the Simplified Method $