Melanie is employed full-time as an accountant for a national hardware chain. She 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 2021 are as follows: 

Melanie’s residence cost $350,000 (excluding land) and has living space of 2,000 square feet, of which 20% (400 square feet) is devoted to business. The office was placed in service in February 2020, and under the Regular Method, Melanie had an unused office in the home deduction of $800 for 2020. Presuming sufficient net income from her consulting practice, what is Melanie’s office in the home deduction under the:

a. Regular Method?

b. Simplified Method?

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Real property taxes Interest on home mortgage Operating expenses of home $3,600 3,800 900