Assignment Problem Six - 8 (Work Space In The Home Costs And CCA) yd midniglednod ovde Olin Packett has decided that he must find a way to earn additional income. While he has a reasonable salary from his current employment, it is not nearly adequate to provide for the luxury items that he feels he really should be enjoying. After consulting his know-it-all brother, he concludes that a home-based online business which provides premium quality organic nut, fruit and candy products would do well. He opens his website for business on March 1, 2019. He will operate this business out of his home. This property was acquired during 2018 at a total cost of $467,000, of which $130,000 can be attributed to the value of the land on which the house is situated. The business will have exclusive use of 23 percent of the floor space in Olin's home. Olin does not believe that the value of the property has changed significantly since its acquisition. Olin was not prepared for the immediate large orders he receives as he thought business would be slow to start. On March 15, 2019, he acquires office, shipping and storage furniture and shelving at a cost of $42,000. Later that month, on March 27, he acquires an all-in-one computer at a cost of $1,940, along with business software at a cost of $467. He also arranges to have a separate phone line installed for the use of the business. As he meets with more suppliers and clients, he purchases a tablet for $400 on June 30 to enable him to operate more efficiently outside his home. The phone package that he acquires includes the use of a toll-free number for his customers, as well as unlimited long distance calls in Canada. colds a build Utilities For Home (Heat, Light, And Water) Mortgage Interest Paid Property Taxes Repairs And Maintenance For Home* For the year ending December 31, 2019, costs associated with owning his home areas follows: $ 2,650 14,600 1,300 House Insurance 7,005 13,400 $38,955 Total of the repair costs, 512,200 represents the cost of replacing the aging cedar siding ordinary day to day maintenance (e.g., replacing light bulbs and furnace filters), During the period March 1, 2019 through December 31, 2019, his sales total $233,000. Costs associated with these sales are as follows: $116,014 Cost Of Merchandise Purchased 16,327 Unsold Merchandise At December 31, 2019 4,206 Packaging Materials Shipping Costs 8,354 Office Supplies 3,210 Telephone (Total Charge For The Period) 862 Advertising In Various Canadian Media 6,438 Insurance On Business Inventories 423 rupes Cleaning Services For Office And Shipping Space 3,250 Meals And Entertainment For Suppliers 2,450 Credit Card Fees 2,300 Estimated Bad Debts 1,450 Olin's parents have been helping him by taking orders and packaging product for shipping. They refuse any payment for their work as they are both bored with the retirement life and, unlike their feel they have more than adequate income for their modest needs. son, Required: A. Can Olin deduct work space in the home costs? Briefly explain your conclusion. B. Compute the minimum net business income or loss that Olin must report in his 2019 personal income tax return. C. Briefly describe any issues that should be discussed with Olin concerning the work spac in his home and business costs. Assignment Problem Six - 8 (Work Space In The Home Costs And CCA) yd midniglednod ovde Olin Packett has decided that he must find a way to earn additional income. While he has a reasonable salary from his current employment, it is not nearly adequate to provide for the luxury items that he feels he really should be enjoying. After consulting his know-it-all brother, he concludes that a home-based online business which provides premium quality organic nut, fruit and candy products would do well. He opens his website for business on March 1, 2019. He will operate this business out of his home. This property was acquired during 2018 at a total cost of $467,000, of which $130,000 can be attributed to the value of the land on which the house is situated. The business will have exclusive use of 23 percent of the floor space in Olin's home. Olin does not believe that the value of the property has changed significantly since its acquisition. Olin was not prepared for the immediate large orders he receives as he thought business would be slow to start. On March 15, 2019, he acquires office, shipping and storage furniture and shelving at a cost of $42,000. Later that month, on March 27, he acquires an all-in-one computer at a cost of $1,940, along with business software at a cost of $467. He also arranges to have a separate phone line installed for the use of the business. As he meets with more suppliers and clients, he purchases a tablet for $400 on June 30 to enable him to operate more efficiently outside his home. The phone package that he acquires includes the use of a toll-free number for his customers, as well as unlimited long distance calls in Canada. colds a build Utilities For Home (Heat, Light, And Water) Mortgage Interest Paid Property Taxes Repairs And Maintenance For Home* For the year ending December 31, 2019, costs associated with owning his home areas follows: $ 2,650 14,600 1,300 House Insurance 7,005 13,400 $38,955 Total of the repair costs, 512,200 represents the cost of replacing the aging cedar siding ordinary day to day maintenance (e.g., replacing light bulbs and furnace filters), During the period March 1, 2019 through December 31, 2019, his sales total $233,000. Costs associated with these sales are as follows: $116,014 Cost Of Merchandise Purchased 16,327 Unsold Merchandise At December 31, 2019 4,206 Packaging Materials Shipping Costs 8,354 Office Supplies 3,210 Telephone (Total Charge For The Period) 862 Advertising In Various Canadian Media 6,438 Insurance On Business Inventories 423 rupes Cleaning Services For Office And Shipping Space 3,250 Meals And Entertainment For Suppliers 2,450 Credit Card Fees 2,300 Estimated Bad Debts 1,450 Olin's parents have been helping him by taking orders and packaging product for shipping. They refuse any payment for their work as they are both bored with the retirement life and, unlike their feel they have more than adequate income for their modest needs. son, Required: A. Can Olin deduct work space in the home costs? Briefly explain your conclusion. B. Compute the minimum net business income or loss that Olin must report in his 2019 personal income tax return. C. Briefly describe any issues that should be discussed with Olin concerning the work spac in his home and business costs