Mr. T has asked you to prepare his tax return. Mr. T is an employee of Telus, as a technical support expert, and he runs a part-time business offering consulting services. He also has an investment in some rental properties, which has been losing money due to high interest costs. Mr. T also day-trades in stock, and has earned capital gains and some losses. Mr. T
ACCT 2235 – HOMEWORK #1
has a $3,000 RRSP deduction available as a subdivision e deduction. Two years ago, Mr. T suffered a very serious loss on his rental properties, and has a Non-capital Loss carryover that he is going to take as a Division C deduction. The only Division E benefit that Mr. T will have is the basic personal tax credit.
What will Mr. T’s Federal Tax payable be, based on the following additional information?
• Employment income $100,000
• Employment deductions 2,000
• Income from business 2,000
• Capital gains on stocks 20,000
• Capital losses on stocks 10,000
• Loss on rental properties 5,000
• Non-capital loss carryover 20,000
Complete the following table to present the solution, showing the Part, Division and Subdivision for each item required in the table:
Part Division Subdivision Description Amount