Mr. Mo carries on business as a sole proprietor. The fiscal year end of the business is December 31. During 2020, its first year of operation, net business loss amounts to $72,000. In addition, the disposal of a business property resulted in an $22,000 capital loss
Which could not be deducted? The following amounts relate to the year ending December 31, 2021:
Business income $127,000
Capital Gains 19,300
Capital Losses (5,400)
Mr. Mo has no other source of income or loss in either year and does not anticipate realizing capital gains in the foreseeable future. Assume that he wishes to minimize his net capital and non-capital loss carry forwards at the end of 2021, without regard to his ability to claim his tax credits for the preceding year (2020). Calculate:
• Mr. Mo’s Net Income For Tax Purposes and Taxable Income for 2021.
• The net capital loss carry forward that will be available at the end of 2021.