ADMS 3520 Chapter Notes -Corporate Tax, Income Statement, Gain Capital

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pucewildebeest131

9 Aug 2012

School

York University

Department

Administrative Studies

Course

ADMS 3520

Professor

Thaddeus Hwong

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Document Summary

+ taxable capital gains which exceed allowable capital. Salary received + taxable benefits are taxable. Some benefits received from employment are not taxable. There are some deductions allowed against employment income. Income from business ch 4 + ch 5. An income statement is required to be prepared with a year end of december 31 using rules from the income. If there is a loss from a business, it is deductible against other income. Income from an unincorporated business is taxable on the personal tax return. (an incorporated company files a corporate tax return). Capital gains are taxable based on of the gain. Taxable capital gain = (1/2 x 1,100) Allowable capital losses are deductible against taxable capital gains only. Income from the sale of capital property such as stocks, mutual funds or land is taxable. This is investment income: interest, dividends, royalties, rental income. Interest and dividend income is listed on a t-5 slip.

Related Questions

The following cases makes different assumptions with respect tothe amounts of income and deductions of Mr. Michel Daigle for thecurrent taxation year under the various subdivisions of Division Bof the Income Tax, and the last two previous yearsâ taxespayable:

Case 2-A

Employment Income	$35,000
Income (Loss) From Business	(10,000)
Income From Property	12,000
Taxable Capital Gains	42,000
Allowable Capital Losses	(18,000)
Subdivision E Deductions (Spousal Support)	(4,000)

Taxable Income Previous Years:

2016: $10,000

2017: nil

Case 2-B

Employment Income	$33,000
Income (Loss) From Business	(39,000)
Income From Property	14,000
Taxable Capital Gains	36,000
Allowable Capital Losses	(42,000)
Subdivision E Deductions (Spousal Support)	(7,000)

Taxable Income Previous Years:

2016: $10,000

2017: $8,000

Required: For Both cases, calculate Mr.Daigleâs Net Income for tax purposes, indicate any possible losscarryovers from the current year, taxes payable for current year,and calculate require installment payment for current year.

(assume Federal rate of 15% and Provincial Rate of 7%)

burgundybat217

Which of the following amounts is NOT deductedin converting Net Income for Tax Purposes to Taxable Income?

	A.	Losses of other years.
	B.	The lifetime capital gains deduction.
	C.	An amount related to the exercise or sale of stock options.
	D.	The excess of allowable capital losses over taxable capitalgains for the current year.

Maxitech is a Canadian company. It has always used a December 31 year end. On January 1, 2016, the company had the following carry forward balances:

- Net Capital Losses 75,600

- Non-Capital Losses 51,400

- Unused Charitable Donations 4,600

During the 2016 taxation year, Maxitech's records show the following results (all amounts are based on the relevant tax rules):

- Net Business Loss 142,000

- Taxable Capital Gains 21,400

- Allowable Capital Losses 6,500

- Charitable Donations 3,200

- Dividends from Taxable Canadian Corporations 30,400

Required: Calculate the Corporation's minimum net income for tax purposes and taxable income for it's 2016 taxation year. Indicate any balances available for carry forward to subsequent years under each of the following assumptions:

A. It is the policy of the company to minimize net capital loss balances prior to using any other type of carry over balance.

B. It is the policy of the company to minimize non-capital losses prior to using any other type of carry over balance.

cerisemole158

ADMS 3520 Chapter Notes -Corporate Tax, Income Statement, Gain Capital

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