Over the past 5 years Paul Brereton has been working for a local bank as a small
Question:
- Over the past 5 years Paul Brereton has been working for a local bank as a small business banker. Because of his gained experience he has decided to start a small tax preparation company to supplement his income. The Business commenced January 1st, 2018.
On that date, he acquired furniture (cca 20%) costing $2,500, a computer (cca 55%) for $900, and software (cca 100%) for business activities of $500. He also has a separate phone line installed which will be solely used for the tax prep business.
The business will be run out of Paul's home making exclusive use of 10% of the total available floor space.
During the period of Jan 1st to December 31st, 2018, his business had total service revenue of $65,000. Cost associated with these services are as follows:
Postage Expense $1,500
Misc Office Supplies $800
Telephone Exp $350
Marketing and Printing $2,500
Paul's home was purchased several years ago for $275,000 (class 1 CCA 4%) of which $75,000 was allocated to land. Cost accrued with respect to the home for the year ending Dec 31st, are as follows:
Utilities $3,000
Mortgage Interest Paid $2,750
Home Insurance $300
Property Taxes $1,250
Repairs and Maintenance $2,000
Total $9,300
A) Can Mr. Brereton deduct workspace in the home costs?
B) Computer the minimum net business income or loss that Paul must report for 2018.
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr