Question

Assignment Problem One - 13 (Net Income For Tax Purposes - Four Cases) The following four Cases make different assumptions with respect to the amounts of income and deductions of Frank Denham for the current year: Case A Case B Case C Case D Employment Income Income (Loss) From Business Rental Income (Loss) Taxable Capital Gains Allowable Capital Losses Subdivision e Deductions $58,200 ( 12,300) 5,400 31,600 ( 12,400) ( 4,100) $82,600 18,400) 12,200 15,600 ( 23,400) I 5,400) $46,700 ( 62,300) 2,600 11,600 ( 10,700) ( 11,600) $33,400 ( 46,200) ( 18,300) 23,100 ( 24,700) (5,600) Required for each Case, calculate Mr. Denham's Net Income For Tax Purposes (Division B income). Indicate the amount and type of any loss carry overs that would be available at the end of the current year, or state that no carry overs are available.

Answer 1

Answers Pgo case A; $58,200 o Less : Loss = Employment Lacome Rental income $5,400 Ilessibusiness loss $5,400 capital Gain= 31,600 12,400 $19,200 Total income $77400 Less: Deduction Taxable income for fave purposes $73,300 Losses carry forward = business loss = $2.300 – 5,400 46,900 وهايو case B = Employment income $82,600 Rental income = 12,200 Less: business loss = 8,400 $3800 capital gains 153600 hill less: capital loss 15,600 total income $86,400 Less: Declections Jacoone for tar purposes $81,000 Corry forward losses =fa3400 –1500 = $7,800 SYDD

case c ఎ Income $ubitoo nil Employment Rental income =2,600 Less: business loss = 2,600 capital gain = 11,600 Less: Capital losses = 101.700 $ 900 Net income $43,600 Less: Deductions $11,600 la come far fare purposes $36,000 cany forward business loss =462,300 -2,600 =$59,700 case DE Income salary $33,400 capital gain 23,100 nil Less: capital lass23,106 total income $33,400 Less Deductions $5,600 Linsome for fox purposes $21,800 carry forward business losses = $46200 Capital losses = $24,700-23,100 = $1,600 36001