Per IRS- an area for a home business must be used "exclusively " for that business. This means that you are not to use this area for any other use than is related to the business. EG. accessing computer to check personal emails. (such as table in kitchen used for crafting for profit may not be used to eat on or kids do home work) Your comments brings up this issue as to the use of the area for making quilts for selling AND personal use. I would be checking with another tax professional to see if you can deduct the room as a expense. Better to be safe than audited. Also IRS says that ALL income must be reported including $ for ebay, craft shows, garage sales, tips ets. Do people do this?????? Unfortunally our current tax code make it to easy to fudge numbers.