Page 1154

reasonable and necessary include the cost of boat engine fuel; boat engine oil; boat and motor repairs; normal boat and motor maintenance; rain clothing; bait; commercial fishing license; employee labor costs; replacement or repairs of all types of fishing nets, not including lead line or float line; year-round boat moorage fees, including boat stall and grid fees; and utility costs to maintain the vessel during the nonwork season. The department will consider a crew member receiving a share of the profit to be self-employed and a crew member receiving a wage to be an employee. (e) Non-personal costs of doing business do not include loan payments on the principal of a loan to purchase capital assets, equipment, machinery, and other durable goods. However, if such goods are purchased on an installment plan, the interest paid as part of each installment payment is deducted. (f) An amount claimed as depreciation or a loss for federal income tax or other purposes, the cost of personal and business entertainment, and the cost of personal transportation, are not considered non-personal costs. (g) For the purposes of this section, a payment on the principal of a real estate mortgage on income-producing property is not a non-personal cost of doing business. However, interest paid on an installment contract for the purchase of income-producing property, and the tax paid on that property, are considered non-personal costs. For a family whose mortgage payment represents an investment in income-producing property, the interest portion of that mortgage payment, the tax on that property, and any other identifiable expenses are considered non-personal costs if the individual can separately identify those costs that apply to the portion of the property used in the self-employed enterprise. (h) Regardless of whether a self-employed individual receives income monthly or less often than monthly, the non-personal costs of doing business allowed under this section are deducted from the income received even if those costs are incurred while the individual is not actually working, or are received in a month in which there is no prorated income. For example, January boat storage fees and engine repair bills are allowed as non-personal costs of doing business, even if the boat only produces income in June. (i) For a self-employed individual receiving income less often than monthly, the allowable, reasonable, and necessary costs of doing business are calculated prospectively on a calendar-year basis. The annual anticipated total of non-personal business costs is subtracted from the anticipated annual gross income from self-employment. The resulting adjusted gross income, is then prorated in accordance with 7 AAC 45.450. This is the monthly income from which disregards are subtracted under 7 AAC 45.470(b) in the months of actual work. (j) For the purpose of anticipating future gross and adjusted gross self-employment income, the department will use the prior year’s actual income for an applicant who applies before or during the current self-employment period, or the current year’s actual income for an applicant who applies after the current self-employment period. When the self-employment enterprise has existed for less than a year, the department will average the past income and project that average to the coming year. If a major change in an individual’s circumstance has occurred that indicates that the income of the previous year will be substantially different from that of the coming year,