Solution to Assignment Problem 15-7,5

Solution to Assignment Problem 15-7,5 - Solution to...

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Solution to Assignment Problem 15-7 2004 3(a) Income from all sources: Accounting Income $110,000 Charitable contributions 3,200 Accounting Gain on Disposition of Land ( 18,000 ) $ 95,200 3(b) Taxable Capital Gains: 1/2 X $18,000 $ 9,000 3(c) Subdivision e Deductions (individuals) 3(d) Current Year Losses Nil NIFTP $104,200 Division C Deductions: Charitable Donation ( 3,200) Dividends from Cdn Corporation ( 11,000 ) Taxable Income $ 90,000 There are no Loss Carryforwards at the end of 2004.
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2005 3(a) Income from all sources: NIL 3(b) Taxable Capital Gains: No Capital Gain to offset current year loss on land NIL 3(c) Subdivision e Deductions (individuals) 3(d) Current Year Losses: Accounting Loss ( 180,000) Add Charitable cont 5,800 Add Loss on Land 9,000 $(165,200) Maximum deduction permitted NIL NIFTP $ NIL Division C Deductions: Dividends from Cdn Corporation ( 19,000) Charitable Contributions: (3/4 of NIFTP) = ¾ of Nil . Nil . Taxable Income NIL
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Loss Carryforwards at the end of 2005: Net Capital Loss: ($9,000 capital loss X 1/2) = $4,500 (non-expiring, therefore company deducts non-capital losses before net capital losses) Non-Capital Loss: o $165,200 ( acctg loss ) - 19,000 ( increase in loss due to div. deduction in Div. C ) = $184,200 o Carryback $90,000 to 2004 for a tax refund o Remainder: ($184,200 - $90,000) = $94,200 LCF Charitable Contribution: o $5,800 must be carried forward (no Carryback provisions)
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2006 3(a) Income from all sources: Accounting Income $ 85,000 Add Charitable contributions 4,100 Less Accounting Gain on Disposition of Land ( 12,000 ) $ 77,100 3(b) Taxable Capital Gains: ½ X $12,000 $ 6,000 3(c)
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This note was uploaded on 04/17/2008 for the course MGMT 4444 taught by Professor Pred during the Spring '08 term at University of Ottawa.

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Solution to Assignment Problem 15-7,5 - Solution to...

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