income tax

AP 14-5 (Investment Tax Credits) case A In 2022, Lumina Ltd, a CCPC with a December 31 taxation year end, hired 18 eligible apprentices-six were hired at the beginning of January, six more August 1 , and the remaining six November 1. Each of the apprentices began with an annual salary of $45,000, all of which qualified for the apprenticeship tax credit. Based on the hiring dates, the first group of six each earned $45,000 for the year while the second group each earned $18,750 and the third group each eamed $7,500. The total amount paid to these individuals in 2022 is $427,500. Lumina Ltd. also acquired new class 53 machinery for $640,000 on November 27, 2022. This equipment is to be used in New Brunswick. The machinery was delivered to the company site in early December and was put into use immediately. The machinery is qualified property for investment tax credit purposes. Required: Describe the 2022 and 2023 income tax consequences of the salary and wages paid to apprentices and the purchase of the class 53 machinery. Specifically, determine whether the amounts qualify for any investment tax credit and, if so, the amount of that tax credit and the 2023 implications of claiming any available tax credit in 2022. Assume that the company will claim the maximum CCA possible on the class 53 machinery in 2022, that the opening UCC in class 53 for 2022 is nil, that no additions will be made to the class in 2023, and that the company will have sufficient Part 1 income tax to fully use any investment tax credits in 2022 Case B Taurus Ltd., a CCPC with a December 31 taxation year end, has been conducting scientific research and experimental development (SRED), which qualifies for additional federal investment tax credit incentives based on its "SRED expenditure limit" Taurus has never been associated with another corporation since its incorporation in 2016. The company has provided the following information for its 2021 and 2022 taxation years: Required: Determine Taurus's SRED expenditure limit for its 2022 taxation year. AP 14-5 (Investment Tax Credits) case A In 2022, Lumina Ltd, a CCPC with a December 31 taxation year end, hired 18 eligible apprentices-six were hired at the beginning of January, six more August 1 , and the remaining six November 1. Each of the apprentices began with an annual salary of $45,000, all of which qualified for the apprenticeship tax credit. Based on the hiring dates, the first group of six each earned $45,000 for the year while the second group each earned $18,750 and the third group each eamed $7,500. The total amount paid to these individuals in 2022 is $427,500. Lumina Ltd. also acquired new class 53 machinery for $640,000 on November 27, 2022. This equipment is to be used in New Brunswick. The machinery was delivered to the company site in early December and was put into use immediately. The machinery is qualified property for investment tax credit purposes. Required: Describe the 2022 and 2023 income tax consequences of the salary and wages paid to apprentices and the purchase of the class 53 machinery. Specifically, determine whether the amounts qualify for any investment tax credit and, if so, the amount of that tax credit and the 2023 implications of claiming any available tax credit in 2022. Assume that the company will claim the maximum CCA possible on the class 53 machinery in 2022, that the opening UCC in class 53 for 2022 is nil, that no additions will be made to the class in 2023, and that the company will have sufficient Part 1 income tax to fully use any investment tax credits in 2022 Case B Taurus Ltd., a CCPC with a December 31 taxation year end, has been conducting scientific research and experimental development (SRED), which qualifies for additional federal investment tax credit incentives based on its "SRED expenditure limit" Taurus has never been associated with another corporation since its incorporation in 2016. The company has provided the following information for its 2021 and 2022 taxation years: Required: Determine Taurus's SRED expenditure limit for its 2022 taxation year