Problem S 3 NITP Div B

# Problem S 3 NITP Div B - \$58,000 Paragraph 3(b Taxable...

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Problem 1 - Section 3 Net Income for Tax Purposes – Division B Income For the 2008 Taxation Year Case 1 Case 2 Employment Income \$90,000 \$34,000 Income (Loss) from Business ( 20,000) ( 60,000) Income from Property 25,000 24,000 Taxable Capital Gains 5,000 12,000 Allowable Capital Losses ( 10,000) ( 10,000) Subdivision e Deductions ( 10,000) ( 8,000) Required: Calculate the Net Income for Tax Purposes (Division B Income). Indicate the amount and type of loss carryovers (if any) available at the end of the current year. Solution to Problem 1 Case 1 Case 2 Paragraph 3(a): Employment Income \$ 90,000 \$34,000 Income from Property 25,000 24,000 \$115,000

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Unformatted text preview: \$58,000 Paragraph 3(b) Taxable Capital Gains \$ 5,000 \$12,000 Allowable Capital Losses ( 10,000) ( 10,000) \$ Nil \$ 2,000 Balance from Par. 3(a) and 3(b) \$115,000 \$60,000 Subdivision e deductions ( 10,000) ( 8,000) Balance Par. 3(c) \$105,000 \$52,000 Deduction under Par. 3(d): Business loss ( 20,000) ( 60,000) Net Income for Tax Purposes (Division B Income) \$ 85,000 \$ Nil In Case 1 : The unused net capital loss carry over from the current year is \$5,000 (\$10,000 - \$5,000) In Case 2 : The unused business loss carry over from the current year is \$8,000 (\$60,000 - \$52,000)....
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Problem S 3 NITP Div B - \$58,000 Paragraph 3(b Taxable...

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