I am of the impression that others responding here are not seeing the big picture in the same manner I see it. But here's my take on it.
Since your daughter is the sole owner of the business and she does not own the property (you the parent own it) and does not pay rent or pay for any utilities for the use of the space by her business, A home office deduction can't be claimed by your daughter, and she can't claim any expenses. She would have to actually pay those expenses either from the business income or her personal taxable income in order to claim/deduct them as a business expense.
