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those items are purchased on an installment plan, the interest paid as part of each installment payment is a nonpersonal cost. (f) Nonpersonal costs of doing business do not include

(1) an amount claimed as depreciation or a loss for federal income tax or other purposes;

(2) the cost of personal and business entertainment; or

(3) the cost of personal transportation. (g) For the purposes of this section, a payment on the principal of a real estate mortgage on income-producing property is not a nonpersonal 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 nonpersonal costs. For a household 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 nonpersonal costs if the individual can separately identify those costs that apply to the portion of the property used in the self-employment enterprise. (h) Regardless of whether a self-employed individual receives income monthly or less often than monthly, the nonpersonal 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 self-employment income. For example, January boat storage fees and engine repair bills are allowed as nonpersonal 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 nonpersonal costs of doing business is subtracted from the anticipated annual income received from the production or sale of goods or services. The resulting self-employment income is then prorated in accordance with 7 AAC 100.174. (j) For the purpose of determining self-employment income for the current and future self-employment period, the department will use the prior year’s actual self-employment income for an applicant who applies before or during the current self-employment period, or the current year’s actual self-employment 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 self-employment income and project that average to the coming year. If a major change in an individual’s circumstance has occurred that indicates that the self-employment income of the previous year will be substantially different from that of the coming year, the department will estimate future self-employment income by using the applicant’s own estimates and additional information or projections from other individual or governmental sources. (k) For an individual who receives self-employment income monthly or more frequently than monthly, the anticipated nonpersonal costs of doing business for the month are added to any nonpersonal costs of doing business that occur in some other month but that are costs that also