1.
Karla had net employment income of $35,000. Unfortunately, her unincorporated flower shop suffered a net business loss of $10,000. In contrast, she had a very good year in the stock market, earning $12,000in dividends and interest from her investments andrealizing the following gains and losses:
Capital Gains$84,000
Capital Losses$36,000
Also during the current year, Karla made deductible contributions of $4,000 to her RRSP.
Instructions:
Calculate Karla's Net Income For Tax Purposes (Division B income) for the current year. Indicate the amount and type of any loss carry overs
that would be available at the end of the year (if any).
This question requires to fill in the14boxes below.Be sure to enter a negative number with anegativesign-orparentheses().If there are
boxes that
wish to leave blank,please enter a zero0.Blank boxes will receive a grade of zero.
3(a) Employment Income Business Income Property Income Total from 3(a) 3(b) Taxable Capital Gains Allowable Capital Losses Total from 3(b) 3(c) Subdivision e Deductions 3(d) Business Loss Property Loss Total from 3(d) Net Income for Tax Purposes Capital Loss Carryover Non-Capital Loss CarryoverJohn secured employment as a commissioned salesman in July, 2020. In 2020, he received a base salary of $60.000. and $15,000 of commissions. John worked away from the office negotiating sales contracts. and he is required to pay his own vehicle and promotional expenses. His employer has signed a Form T2200 certifying that requirement, and certifying that no reimbursements are paid for any expenses John incurs to earn commissions. John drove his car 20,000 kilometres in the last six months of 2020 and 15,000 were employment related. John incurred the following costs from July through December 2020: Advertising and Promotion $6,000 Meals and Entertainment with Clients 10,000 Vehicle Operating Costs 5,000 Instructions: This question requires you to fill in 11 blanks in the table below. Do not leave any blanks - enter 0 if applicable. Enter all values as positive numbers: Expenses deductible under: (1)_(f) (1)_(h;1) Advertising and Promotion Meals & Entertainment with Clients Vehicle Operating Costs Total Limited to (in dollars): John will prefer to deduct total employment expenses in the amount of $ under Section 8(1)( ). i Beilun is 68 years old and widowed. She is retired and has income from a registered pension plan of $53,000 in 2020. Beilun paid for her grandson, Liu, to attend college. His tuition for 2020 was $6,500 and he has agreed to transfer any unused credits to his grandmother. Liu's income in 2020 is $12,000 from a part-time summer job. Calculate Federal Tax Payable for Beilun for 2020 below. Round your answers to the nearest dollar where necessary. The amount for her Federal Tax Payable before Tax Credits has already been correctly calculated: Total Federal Tax before Tax Credits $8,195 Name of Tax Credit: Base Amount: Total Credit Base: Federal Tax Credit Rate: x15% Federal Tax Payable: ABC Co. provides a company car to Danny. The cost of the car was $20,000 including HST. The car was driven for a total of 26,000 kilometres during 2020 and its operating costs for the year were $4,000. It was used by Danny for the whole year. He drove a total of 9,000 kilometres for personal purposes. Instructions: Calculate the Auto Benefit that Danny will include in his employment income by filling in the five (5) blanks below. Do not leave any blanks - if there is no value to input, enter I'none" : Standby Charge: Reduced Standby Charge: Operating Cost Benefit: Alternate Operating Cost Benefit: Total Auto Benefit: During 2020, Canadian resident Biff Johnson has calculated his Taxable Income to be $53,175. Instructions: Calculate Biff's 2020 federal Tax Payable before consideration of any tax credits. Complete the six (6) blanks in the table below: Federal Tax Payable Before Credits Bill is single with no dependants. For 2020 his net income for tax purposes was $80,000, his Taxable Income was $70,000 and he incurred medical expenses of $4,232. How much will Bill be able to claim for his medical expense tax credit? 0 $275.25 0 $319.80 0 $634.80 030 l Opting is a Canadian public company. Opting Inc. has a very generous stock option plan that allows all of their long term employees to participate. Sandra has worked for the Company for over 10 years and has participated in this plan on a regular basis. With regards to the last options granted to her, the following information is relevant: . On January 1, 2018, Sandra was granted options to acquire 150 of the Company's shares at a price of $15.00 per share. On that date, the Company's shares had a f' market value of $14.50 per share . Sandra exercises all of these options on February 28, 2019 when the Company's shares have a fair market value of $18.00 per share. . On December 1, 2020, all of the shares acquired with the options are sold for $19.00 per share. Instructions: Indicate the tax effect of these transactions on Sandra's Net Income for Tax Purposes (NITP) and Taxable Income (TI) during 2018, 2019, and 2020. Where there is no tax effect, enter "none". Effect on NITP: Effect on Tl: Effect on NITP: Effect on Tl: Effect on NITP: Effect on Tl: A taxpayer whose Allowable Capital Losses are higher than their Taxable Capital Gains in a taxation year will have a net capital loss carryover. A net capital loss carryover can be carried back and toward . A net capital loss carryover can be deducted against in the year(s) of carryover. For each of the four (4) characteristics listed, indicate the number of the item (1 through 6) that provides the BEST definition of that characteristic. . v Neutrality . v Vertical Equity _ v International Competitiveness _ v Balance 1. Two individuals with the same level of income should pay the same amount of tax. 2. An individual who earns more than $214,368 should pay more tax than someone who earns less than $150,473. 3. The tax system should be able to easily adjust when necessary to meet changes in economic or social conditions. 4. A tax system should ensure that no one type of business or individual should carry a disproportionate share of the tax burden. 5- A country's tax system should consider how they compare to other countries to ensure that taxpayers do not leave for preferable tax conditions. 6. Taxpayers' economic decisions regarding how to maximize their use of resources should not be influenced by differing tax treatments. Mark has taxable income of $83,864 in 2020. He wishes to claim the Canada Caregiver Tax Credit for his father, George. George is 71 years old and lives with Mark. He has a physical infirmity but does not qualify for the disability tax credit. George has Net Income for Tax Purposes of $19,267. Calculate the amount that Mark may claim for this credit with respect to his father, George
