“In estimating the value of the discretionary/non-business portion of the Respondent’s home office expense, Ms. Russell took the rent and occupancy costs set out in the annual financial statements of Politis Engineering Ltd. and deducted a “reasonable business portion” based on assumed rent of $1,000 per month for office space in a commercial building. She then added back the excess rent and occupancy costs with a gross-up in calculating the Respondent’s income for support purposes.
The Applicant argues that this is not correct and that the amount of rent chosen by Ms. Russell is arbitrary. She states I should apply the reasons of Croll J. in Riel v. Holland, [2002] O.J. No. 5609 (S.C.J.) and the relevant provisions of the Income Tax Act, R.S.C. 1985 (5th Supp), c. 1, when considering the home office: “An individual who works from his or her home is entitled to deduct expenses relating to the work space in that home if that work space constitutes the individual’s principal place of business or if that work space is used exclusively for the purpose of earning income from business and used on a regular and continuing basis for meeting clients, customers or patients of the individual in respect of the business.”: at para. 32.
The Respondent does not meet clients in his home. He uses his home office to make phone calls, use his computer, send email communication and do administrative work for the operation of his business. He meets with clients at their offices, on job sites and in coffee shops. He admits that, because he lives alone, his work product sometimes “spills out” from the office to other areas of his home.
The Respondent has had a home office since 1992. It is the primary site of the operation of his business. If he did not work from home, he would have the expense of rent and other costs of leasing a commercial space. I agree with Ms. Russell’s treatment of the home office expenses in her income calculations. The amount of rent chosen in the calculation is based on her professional knowledge, research and expertise. I do not dispute her figure. I make no adjustment to Ms. Russell’s calculations for this item.”