The following information has been provided by your client, Karl Kraft:

Additional Information

(1) Karl had a $10,000 net capital loss which arose in 1998, and has not been deducted previously.

(2) Karl had no capital gains prior to 2014 and he did not claim any net capital losses in any preceding years.

(3) In 2015, Karl had a rental property loss of $1,000 and had no property income in 2014 or 2015.

REQUIRED

(1) Determine Karl’s income from the sources indicated for 2014 to 2016 according to the ordering rules in section 3.

(2) Determine Karl’s taxable income from the sources indicated for 2014 to 2016 according to the ordering rules in Division C after amending the returns.

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Capital gains (CG) Capital losses (CL) (excluding BIL) Business investment loss (BIL) before adjustment. 2014 - $6,000 18,000 2015 $84,000 2016 $44,000 30,000