Camille operates a child care service from her home. Her gross business income for 2018 amounted to $42 350. Her tax-deductible business expenses consisted of the following:
Advertising $1700 Dues, memberships, subscriptions 520 Motor vehicle expenses 1115 Supplies 582 M eals and entertainment 495 O ther expenses 437
Camille can also deduct home expenses, such as utilities, property taxes, house insurance, mortgage interest, and maintenance for the business use ofa workspace in her home. The amount that may be deducted is a proportion ofthe total annual home expenses allocated to the workspace on a reasonable basis, such as area or number of rooms. Camille's eligible home expenses for the year were:
Heat $3750 Power 2480 Water 610 Houseinsurance 1420 Maintenance 1930 M ortgage interest 6630 Property taxes 3260 Other expenses 690
The house covers 345 square metres and consists ofeight rooms. Camille uses one room with an area of 45 square metres as her business office.
QUESTIONS
1. What portion ofher eligible home expenses may Camille claim as tax-deductible expenses if the expenses are allocated on the basis of
(a) area? (b) number of rooms?