Study Guides (258,481)
CA (124,951)
UTSC (8,088)
MGA (147)
MGAC50H3 (7)
Final

MGAC50H3 Final: S - Chapter 10 (P23).pdf

2 Pages
169 Views

Department
Financial Accounting
Course Code
MGAC50H3
Professor
Sathees Ratnam

This preview shows half of the first page. Sign up to view the full 2 pages of the document.
Introduction to Federal Income Taxation in Canada
252
Solution 23: Income and Taxable Income, Ordering Rules
2013
2014
Par. 3(a) Income from non-capital sources (non-negative amounts only):
Employment income .....................................................................
$ 47,000
$ 55,000
Other business income ..................................................................
Nil
Nil
Property income ...........................................................................
10,000
16,000
Income from non-capital sources..................................................
$ 57,000
$ 71,000
Par. 3(b) Net taxable capital gains (non-negative):
Listed personal property(1) ............................................................
$ 500
$ 10,125
Personal-use property(2) ................................................................
1,000
Nil
Other .............................................................................................
3,000
(10,125)(3)
Net taxable capital gains ...............................................................
$ 4,500
Nil
Par. 3(a) + par. 3(b) ......................................................................
$ 61,500
$ 71,000
Par. 3(c) Support payments .................................................................................
$ (7,000)
$ (7,000)
RRSP
(1,000)
(3,000)(4)
Total par. 3(c) deductions
$ (8,000)
$ (10,000)
Par. 3(a) + par. 3(b) par. 3(c)
$ 53,500
$ 61,000
Par. 3(d) Business loss ........................................................................................
$ (14,000)
$ (23,000)
Allowable business investment loss .....................................................
(12,000) (3)
Rental loss ............................................................................................
(4,000)
Division B ....................................................................................................................
$ 39,500
$ 22,000
Par. 111(1)(b) Net capital loss(5) ..................................................................
(4,500)
Nil
Par. 111(1)(a) Non-capital loss carried forward(6) .......................................
(19,808)
(6,395)
Taxable income (equal to personal and employment tax credit bases) ….. ..........
$ 15,192
$ 15,605
NOTES TO SOLUTION
(1) Listed personal property: 2013 $6,000 $5,000 (carried forward from 2010 [sec. 41])
$1,000 1/2 = $500
(2) Personal-use property losses denied.
(3) Other capital property 2014
Allowable capital losses (1/2 $45,000) ..............................................................................
$ 22,500
Less: allowable business investment loss applied in par. 3(d) (1/2 $24,000) ....................
(12,000)
$ 10,500
Amount which can be applied under par. 3(b) ....................................................................
10,125
Balance which can be carried forward or backward as a net capital loss ............................
$ 375
(4) (a) RRSP contribution deduction for 2013 would be limited by the lesser of:
(i) 18% of 2012 earned income ($33,250) = $5,985
(ii) $23,820
Lesser amount .....................................................................................................
$ 5,985
Minus the pension adjustment for 2012 ......................................................................
Nil
Net contribution limit ..................................................................................................
$ 5,985
Unused RRSP contribution room to be carried forward ($5,985 $1,000) .................
$ 4,985
(b) RRSP deduction for 2014 would be limited to the lesser of:
(i) 18% of 2013 earned income (see below: $12,000) = $2,160
(ii) $24,270
Lesser amount .....................................................................................................
$ 2,160
Minus the pension adjustment for 2013 ......................................................................
Nil
Unused RRSP deduction room ....................................................................................
4,985
Total available .............................................................................................................
$ 7,145
2014 RRSP deduction limited to $3,000 contribution
Earned income for 2013 would be:
Employment income ...........................................................................................
$ 30,000
Business loss .......................................................................................................
(14,000)

Loved by over 2.2 million students

Over 90% improved by at least one letter grade.

Leah — University of Toronto

OneClass has been such a huge help in my studies at UofT especially since I am a transfer student. OneClass is the study buddy I never had before and definitely gives me the extra push to get from a B to an A!

Leah — University of Toronto
Saarim — University of Michigan

Balancing social life With academics can be difficult, that is why I'm so glad that OneClass is out there where I can find the top notes for all of my classes. Now I can be the all-star student I want to be.

Saarim — University of Michigan
Jenna — University of Wisconsin

As a college student living on a college budget, I love how easy it is to earn gift cards just by submitting my notes.

Jenna — University of Wisconsin
Anne — University of California

OneClass has allowed me to catch up with my most difficult course! #lifesaver

Anne — University of California
Description
252 Introduction to Federal Income Taxation in Canada Solution 23: Income and Taxable Income, Ordering Rules 2013 2014 Par. 3(a) Income from non-capital sources (non-negative amounts only): Employment income............................................................$....55,00047,000 Other business income.................................................Nil.............Nil Property income ..................................................................16,000... 10,000 Income from non-capital sources..............................................$....71,0000 Par. 3(b) Net taxable capital gains (no(1)egative): Listed personal property .............................................500....$...$10,125 Personal-use property ..............................................1,000.............Nil Other...............................................................3,000.......(10,125).......... Net taxable capital gains...........................................4,500...........$.Nil Par. 3(a) + par. 3(b)........................................................$....71,000.... 61,500 Par. 3(c) Support payments..................................................................$...(7,000)$.... (7,000) RRSP (1,000) (3,000) (4) Total par. 3(c) deductions $ (8,000) $ (10,000) Par. 3(a) + par. 3(b) – par. 3(c) $ 53,500 $ 61,000 Par. 3(d) Business loss.....................................................................$ (23,000).....$....(14,000) Allowable business investment loss..........................................—........(12,000) (3) Rental loss.................................................................—.........(4,000).......... Division B.......................................................................................$....22,000..............$.... 39,500 Par. 111(1)(b) Net capital loss ................................................................Nil(4,500) (6) Par. 111(1)(a) Non-capital loss carried forward .......................................(1(6,395) Taxable income (equal to personal and employment tax credit bases) …........$.... 15,192 $ 15,605 —NOTES TO SOLUTION (1) Listed personal property: 2013 $6,000 – $5,000 (carried forward from 2010 [sec. 41])  1 $1,000  / =2$500 (2) Personal-use property losses denied. (3) Other capital property — 2014 Allowable capital losses ( 2  $45,000).............................................................................. Less: allowable business investment loss applied in par. 3(d) ( 2  $24,000)....................(12,000) $ 10,500 Amount which can be applied under par. 3(b).......................................................10,125....... Balance which can be carried forward or backward as a net capital loss.......................$.... 375 (4) (a) RRSP contribution deduction for 2013 would be limited by the lesser of: (i) 18% of 2012 earned income ($33,250) = $5,985 (ii) $23,820 Lesser amount .....................................................................$.....5,985..................... Minus the pension adjustment for 2012 ...........................................................Nil........ Net contribution limit..................................................................$.....5,985..................... Unused RRSP contribution room to be carried forward ($5,985 – $1,000)................. $ 4,985
More Less
Unlock Document


Only half of the first page are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

Log In


OR

Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit