TAXATION question

Question 2 (25 Marks) Mr. Randy Raft wanted to start a bome-based business that would specialize in selling posters. The business would be operated from his principal residence. He set aside 20% of the total floor space in the residence for the poster operations Mr. Randy Raft's principal residence, costing $ 970.000 in total, was acquired on January 1, 2019. It is estimated that $ 270,000 of this total value can be attributed to the land value. Mr. Randy Raft incurred the following 2019 costs relating to the principal residence ) 1 he ws BASES The business commenced operations on February 01, 2019. On that date, Mt. Randy Raft purchased the following assets to be used in his new business . In addition, Mt. Randy Raft had a separate telephone line installed for dealing with the mail order business During the period February 1, 2019, through December 31. 2019. Mr. Randy Raft's mailorder sales totaled S 900,000. Costs associated with these sales included the following: Cesare the 2010 M op TC w SAN Required: Can Mr. Randy Raft deduct work space in the home costs? Briefly explain your decision. Calculate Mr. Randy Ratt's 2019 minimum net business income or loss that he will report on his 2019 income tax retum c Briefly discuss any issues that should be discussed with Mr. Randy Raft regarding the work space in his home and business costs Question 2 (25 Marks) Mr. Randy Raft wanted to start a bome-based business that would specialize in selling posters. The business would be operated from his principal residence. He set aside 20% of the total floor space in the residence for the poster operations Mr. Randy Raft's principal residence, costing $ 970.000 in total, was acquired on January 1, 2019. It is estimated that $ 270,000 of this total value can be attributed to the land value. Mr. Randy Raft incurred the following 2019 costs relating to the principal residence ) 1 he ws BASES The business commenced operations on February 01, 2019. On that date, Mt. Randy Raft purchased the following assets to be used in his new business . In addition, Mt. Randy Raft had a separate telephone line installed for dealing with the mail order business During the period February 1, 2019, through December 31. 2019. Mr. Randy Raft's mailorder sales totaled S 900,000. Costs associated with these sales included the following: Cesare the 2010 M op TC w SAN Required: Can Mr. Randy Raft deduct work space in the home costs? Briefly explain your decision. Calculate Mr. Randy Ratt's 2019 minimum net business income or loss that he will report on his 2019 income tax retum c Briefly discuss any issues that should be discussed with Mr. Randy Raft regarding the work space in his home and business costs