Chapter10 - Taxable Income and Taxes Payable Chapter 10 By...

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Unformatted text preview: Taxable Income and Taxes Payable Chapter 10 By James B. MacNeill Taxable Income and Taxes Payable Division C Division E Taxable Income Tax Credits Stock Option Deduction Found at 110(1)(d), (d.1) 1/2 of Employment Benefit Allowed as Deduction If Exercise Price is Greater than FMV at Time Granted In Year Stock Sold for CCPC Certain Receipts GIS Social Assistance WSIB Payments Loss Carryovers Found in Section 111 NonCapital Losses Net Capital Losses (b) Restricted Farm Losses (c) Farm Losses 111(1)(a) 111(1) 111(1) 111(1)(d) Capital Gains Deduction Found in 110.6 Up to $500,000 of Capital Gains on Shares of a Qualified Small Business Corporation and/or Qualified Farm Property Ordering of Deduction Section 110 i.e., Stock Options Section 111 Loss Carryovers Section 110.6 Capital Gains Deduction Computation of Tax Found in Section 117 Federal Rates Range 0 - $35,595 $35,595 - $71,190 $71,190 - $115,739 > $115,739 Federal Tax 16% $5,695 + 22% $13,526 + 26% $25,109 + 29% NonRefundable Tax Credits Found in Section 118 See Page 489 for Complete List Dividend Tax Credit and 82(3) Election One Spouse can Transfer Dividends to the Other Spouse Only if the Quantum of the Dependent Spouse's Credit Increases Foreign Tax Credits Found at Section 126 To Alleviate Double Taxation Generally only Allowed to the Extent it would Be Taxed in Canada Federal Political Contribution 127(3) Contribution 0 - $400 $400 - $750 $750 - $1,275 > $1,275 Tax Credit 75% $300 + 50% $475 + 33% $650 OAS Clawback 15% of Excess Income Over $55,309 Amount of Clawback is a Deduction 60(w) Alternative Minimum Tax (AMT) Temporary Tax on Sheltered Income Federal Tax Rate is 16% Adjusted Taxable Income page 518 Basic Exemption $40,000 Credit Claimed in Future Years Taxable Income and Taxes Payable Chapter 10 By James B. MacNeill ...
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