Elizabeth is a qualified engineer who works for the Main Roads Department as an employee. She has a room set up as an office in her home to enable her to do some work there in the evenings. Elizabeth finds the room very convenient but does not have any clients visiting her at home. The room is fully fitted out with the normal office equipment, including a computer and printer. The home office represents 10% of the overall floor space of the home. In the current tax year ended 30 June she incurred the following expenses:

• Home office share of interest on home loan $1000.

• Home office share of council rates on home $150.

• Home office share of electricity $100.

• Depreciation on office equipment used 100% for income-earning purposes $600.

What amount can Elizabeth claim as deductions for the current tax year ended 30 June?

Select one:

1. $2000.

2. $700.

3. $850.

4. $1000.

5. $1400.